The 'Common Mistake' People Make When Divorcing: Misunderstanding Financial Settlements

When a marriage ends, emotions run high and decisions often feel overwhelming. In the quest for a clean break, many couples in England and Wales are turning to DIY divorces—opting to settle financial and property matters themselves without legal assistance. But according to a groundbreaking national study, this popular approach may be leading thousands of people to make serious and costly mistakes.

At the heart of the problem is a fundamental misunderstanding of how the law governs the division of assets during divorce. The most common mistake? Believing that everything is automatically split 50/50.

The Study That Revealed the Truth

A new report co-led by Professor Emma Hitchings, a family law expert at the University of Bristol, surveyed over 20,000 people across England and Wales to assess public knowledge of divorce-related laws. The results were striking: 30% of participants mistakenly believed that assets are always equally divided after a divorce. Even more concerning, only 37% correctly understood that the law requires a more nuanced approach—one where the length of the marriage and other factors play a key role in dividing finances and debt.

“This is the first national study to assess what people know about how assets are shared on divorce,” said Professor Hitchings. “Perhaps unsurprisingly, misconceptions are widespread and knowledge is patchy as the laws can be complex.”

The Risks of Going It Alone

DIY divorces may seem like a cost-effective and straightforward solution—especially in an era where legal aid has been largely removed for family law matters in England and Wales. However, these types of separations can come with hidden legal traps.

“The system is highly discretionary and a legally difficult concept to navigate,” Hitchings explained. She pointed out that when couples agree on a financial settlement without legal intervention, they are free to divide assets however they choose, regardless of what the law might consider fair or appropriate. Unfortunately, this freedom often rests on a foundation of misunderstood rights and responsibilities, particularly among those with limited access to legal information.

This lack of legal understanding can lead to unfair settlements, particularly in cases where one party may be financially disadvantaged or unaware of their entitlements. For instance, a stay-at-home parent may waive their claim to a portion of the family home or pension, not realizing they are legally entitled to seek it.

Gendered Gaps in Knowledge

The study also uncovered gender differences in understanding the law. Women were generally more knowledgeable about legal matters relating to children, such as custody and parental responsibility. In contrast, men were more likely to understand the financial aspects of divorce, including asset division.

These knowledge gaps can further compound existing inequalities. A woman prioritizing her children’s well-being might agree to a quick financial settlement without fully appreciating the long-term impact, especially if she does not have equal financial knowledge or access to legal advice.

Why Legal Aid—and Legal Advice—Matters

Before 2013, legal aid was available to support individuals navigating divorce and separation, particularly in cases involving financial disputes. However, changes to funding have drastically limited access to free or subsidized legal support. This has led to a growing number of people handling divorces without legal representation, relying instead on online information, informal advice, or assumptions.

Ash Patel, Programme Head for Justice at the Nuffield Foundation, which funded the study, emphasized the risks of this shift. “Without earlier, and more accessible legal advice, unsatisfactory and unfair financial arrangements could be agreed,” he said.

He and Professor Hitchings are among the many legal experts now calling for systemic change—arguing that offering early-stage legal advice, or even basic legal education, should be a policy priority.

What the Law Actually Says

Contrary to popular belief, UK law does not mandate an automatic 50/50 split in all divorce cases. Instead, the courts consider a range of factors under Section 25 of the Matrimonial Causes Act 1973, including:

• The length of the marriage
   
• Each party’s financial needs, income, earning capacity, and contributions
   
• The standard of living enjoyed during the marriage
   
• The needs of any children involved
   

While longer marriages are more likely to result in equal division of assets, shorter marriages or those with significant pre-marital wealth may lead to different outcomes.

Additionally, financial orders—such as consent orders or clean break orders—are not automatic. If a couple divorces without applying for a financial order, they leave themselves open to future claims by their ex-spouse, even years after the divorce is finalized.

Real-Life Consequences of Misunderstanding the Law

The impact of poor financial settlements can last a lifetime. Consider the case of someone who gives up their share of a pension or a business to speed up the divorce, only to struggle financially later in life. Or the parent who forgoes spousal maintenance, not realizing they are entitled to support while raising young children.

There are also long-term legal risks: without a formal financial order from the court, ex-spouses can come back years later to make a claim if one party becomes wealthier. A well-known example is the case of Vince v Wyatt [2015], where an ex-wife successfully made a financial claim over 20 years after the divorce was finalized, because no financial order had been made.

What Can Be Done?

The findings of the study have sparked a growing movement toward reform. Legal experts, charities, and academics are urging the government to consider several possible solutions:

• Restoring some level of legal aid for family law cases
   
• Mandatory early legal information sessions before financial agreements are made
   
• Public awareness campaigns to correct misconceptions about divorce law
   
• Online tools with built-in legal guidance to aid DIY divorce applicants
   

While full legal representation may not be feasible for all, ensuring that divorcing couples have access to accurate legal advice could help prevent many of the issues raised in the study.

Conclusion: Don't Let Misunderstanding Cost You

Divorce is one of the most significant legal and emotional decisions a person can face. While the trend toward DIY divorces continues to grow, the recent national study serves as a crucial reminder: misunderstanding the law can have serious financial and emotional consequences.

If you or someone you know is considering a divorce, don’t rely on guesswork or popular myths. Understanding your legal rights—and seeking advice from qualified professionals—can make all the difference.

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