Last Updated: 28 August 2026 I Reading Time: 6 minutes
Summary
The Government is considering significant changes to the law governing finances when relationships end. Its consultation, A Fairer End to Relationships, proposes reforms to financial remedies on divorce and stronger protections for qualifying cohabiting couples. The consultation closed on 14 August 2026.
The proposals could make financial settlements after divorce more structured and predictable, including clearer rules around sharing, financial needs, pensions and nuptial agreements. The Government is also proposing a new legal framework for certain cohabiting couples who separate.
However, it is important to stress that these proposals are not currently law. The existing legal framework continues to apply unless and until any reforms are formally introduced and brought into force.
Quick answer
Could divorce finances be about to change? Potentially. The Government has proposed reforms that could make financial remedies on divorce clearer and more predictable by putting principles such as “sharing” and “needs” into legislation, introducing a more structured approach to assessing needs, requiring greater consideration of pensions and creating a framework for qualifying nuptial agreements. It is also considering new financial protections for qualifying cohabiting couples.
In this article
- What is the Government proposing?
- Why is divorce financial law being reviewed?
- How could financial settlements change?
- What could happen to pensions?
- Could pre-nuptial and post-nuptial agreements become legally binding?
- What could change for unmarried couples?
- What does this mean if you are separating now?
- Are the proposals law yet?
- How GLP Solicitors can help
- Frequently asked questions
Key takeaways
- The Government has proposed major reforms to financial arrangements following divorce and relationship breakdown.
- The consultation A Fairer End to Relationships closed on 14 August 2026.
- The proposals would put established principles such as sharing and needs into legislation.
- The Government is considering a three-stage approach to financial needs following divorce, with children’s welfare considered first.
- Pensions could receive greater attention when financial orders are made.
- The Government is proposing qualifying nuptial agreements, which could give couples greater certainty about their financial arrangements if they divorce.
- New protections could be introduced for certain cohabiting couples, although these would be different from the financial framework applying to married couples.
- None of these proposed reforms are currently law. The existing law continues to apply.
Why is the Government looking at divorce financial reform?
When a marriage or civil partnership ends, sorting out the finances can be one of the most difficult parts of the process.
There may be a family home, savings, investments, pensions, businesses, debts and ongoing income to consider. There may also be children whose housing and financial needs need to be prioritised.
At present, financial remedies on divorce are governed primarily by legislation including the Matrimonial Causes Act 1973, alongside decades of case law.
The Government says that the existing system can be difficult to understand and that its discretionary nature can make outcomes harder to predict. The Law Commission’s 2024 scoping work identified concerns around clarity, certainty and accessibility.
The consultation therefore asks whether parts of the current law should be put into clearer statutory form.
The Government describes its proposed approach as “codification-plus”.
In simple terms, this would mean putting established legal principles into legislation while making targeted changes in areas where the current law is considered uncertain.
What could change when finances are divided on divorce?
One of the central proposals is to establish a clearer overarching objective for financial remedies.
The Government proposes that the court’s objective should be to achieve a fair outcome, applying two established principles:
- Sharing
- Needs
The proposals would give these principles a clearer statutory framework.
What does “sharing” mean?
The sharing principle recognises that assets acquired during a marriage can generally be considered the product of the marital partnership.
The Government proposes that matrimonial property should start from an equal-sharing position, unless an unequal division is required to meet needs.
This does not mean that every divorcing couple would automatically split everything 50/50.
The Government’s proposals recognise that needs will remain particularly important. In many cases, there may not be enough assets to meet both parties’ needs through equal sharing.
The proposals would also introduce clearer definitions of matrimonial and non-matrimonial property.
What about “needs”?
For many couples, needs are likely to remain the most important consideration.
The Government is proposing a more structured approach to assessing needs.
The proposed three-stage approach would be:
Stage 1: Children’s needs
The welfare and needs of children would be considered first.
Stage 2: Housing, income and pension needs
The court would then consider the parties’ capital, income, housing and pension needs, as far as available resources allow.
Stage 3: Discretionary needs
Where resources permit, the court could consider additional discretionary needs, such as certain lifestyle-related expenditure.
The proposals are intended to make the process easier to understand and create greater consistency in how financial needs are considered.
Could divorce settlements become more predictable?
That is one of the main aims of the proposed reforms.
Financial remedy cases currently involve a significant degree of judicial discretion. This flexibility allows courts to take account of the circumstances of individual families, but it can also make outcomes difficult to predict.
The Government believes that clearer statutory principles could make the system more accessible and help separating couples understand the likely framework for resolving their finances.
This could potentially make it easier for couples to negotiate financial settlements without going to court.
However, it is important not to assume that reform would mean every divorce follows a fixed formula.
Individual circumstances would still matter, particularly where there are children, significant financial needs, complex assets or other factors affecting the family’s financial position.
Could pensions become more important in divorce settlements?
Yes.
Pensions can be one of the largest assets accumulated during a marriage, but they can sometimes receive less attention than more visible assets such as the family home.
The Government is proposing that courts should specifically consider pension needs and pensions accrued during the marriage when making financial orders.
This is particularly relevant where one person has reduced their working hours or left employment to care for children.
For example, one spouse may have a substantial workplace pension while the other has built up significantly less pension provision because they spent years caring for the family.
A financial settlement that looks only at the value of the house and savings could fail to reflect the longer-term financial position of both parties.
Pensions can therefore be an important part of achieving a fair financial settlement.
What could happen to pre-nuptial and post-nuptial agreements?
Another significant proposal is the introduction of qualifying nuptial agreements.
A pre-nuptial agreement is made before marriage, while a post-nuptial agreement is made after marriage. These agreements can set out how a couple intends their finances to be dealt with if the relationship later ends.
Currently, nuptial agreements are not automatically binding in England and Wales. Instead, case law determines the weight that should be given to them.
The Government is proposing a framework under which qualifying nuptial agreements could become legally binding, provided specified safeguards are met.
The proposals would still protect financial needs.
In particular, the Government states that a qualifying nuptial agreement should not allow someone to contract out of meeting the financial needs of themselves or their children.
This could provide greater certainty for couples who want to agree their financial arrangements in advance.
What could change for couples who live together but are not married?
The consultation is not only about divorce.
The Government is also proposing a new framework for cohabiting couples who separate.
This is important because cohabiting couples currently do not have the same financial framework as married couples when their relationship ends.
There is no general equivalent to the financial remedy system available on divorce.
Instead, unmarried couples may have to rely on areas of law such as property and trust law, depending on their circumstances.
The Government’s consultation proposes a new needs-based framework for qualifying cohabitants.
Who could qualify?
Under the proposals, couples without children would generally need to have lived together for at least three years.
However, the Government proposes removing that minimum period where the couple have a child together or there is a child of the family.
The proposals also contemplate a two-year time limit for bringing a financial claim following separation.
Again, these are proposals rather than current law.
Would unmarried couples automatically get a 50/50 financial split?
No.
In fact, the proposed cohabitation framework is specifically different from the proposed divorce framework.
The Government proposes that sharing would not apply to qualifying cohabitants.
Instead, the focus would be on needs.
The proposed framework would prioritise children’s needs and then consider the financial needs of the individuals, including housing, capital, income and pensions where resources allow.
The proposals therefore do not amount to creating a “common law marriage”.
They would create a specific statutory framework for qualifying cohabitants while maintaining a distinction between marriage and cohabitation.
Could unmarried couples receive maintenance?
Potentially, but the proposed rules would be much more limited than those applying to divorce.
The Government proposes that maintenance for qualifying cohabitants should generally only be available in exceptional circumstances, such as serious health issues or disability.
Where maintenance is awarded, the proposal is that it should be time-limited rather than an open-ended “joint lives” order.
The Government’s preference would generally be for needs to be met through other remedies, such as property adjustment or lump-sum orders.
Could cohabiting couples opt out of the proposed protections?
The Government is proposing an opt-out model.
Under this approach, qualifying cohabitants would be covered by the statutory framework automatically, unless they mutually agree to opt out.
The proposals include safeguards intended to make sure that both parties understand what they are giving up.
These safeguards could include:
- A valid contract
- Execution as a deed
- Financial disclosure
- Independent legal advice for both parties
- Protection against undue influence or misrepresentation
The Government specifically recognises the importance of safeguards where there may be financial vulnerability or domestic or economic abuse.
What about unmarried partners when someone dies?
The consultation also considers inheritance rights for qualifying cohabitants.
Currently, if someone dies without a valid Will, an unmarried partner does not automatically inherit under the intestacy rules simply because they lived together for many years.
The Government is proposing that qualifying cohabitants could potentially receive the same intestacy rights as spouses or civil partners, subject to the final rules.
This is another reason why estate planning remains important for unmarried couples.
A valid Will can provide clarity about what should happen to property, savings and other assets after death.
What does this mean if you are separating now?
If you are currently going through a separation or divorce, you should not wait for the proposed reforms before dealing with your finances.
The consultation has closed, but the proposals have not become law.
The existing legal framework continues to apply.
If you are separating, it can be important to understand your current financial position, including:
- The family home and other properties
- Mortgages and other debts
- Bank and savings accounts
- Investments
- Pensions
- Business interests
- Income
- Personal assets
- Inheritances or gifts
- Any existing agreements between you and your partner
You should also consider arrangements for your children and how their housing and financial needs will be met.
A financial settlement can help provide certainty and, where appropriate, may include a clean break to prevent future financial claims between former spouses.
The right approach will depend on your individual circumstances.
What happens next?
The Government’s consultation closed on 14 August 2026 after seeking views from legal professionals, organisations and members of the public.
At the time of writing, the proposals remain proposals.
That means couples should not make important financial decisions on the assumption that the suggested reforms will definitely become law or that they will take effect in their proposed form.
Any future legislation would need to go through the appropriate parliamentary process before becoming law.
For now, the existing law remains the framework for financial settlements following divorce and for disputes involving unmarried couples.
How GLP Solicitors can help
Financial issues can be one of the most stressful parts of separating from a partner.
At GLP Solicitors, our family law team can provide advice on the financial aspects of separation and divorce, helping you understand your position and the options available to you.
Depending on your circumstances, this may include advice about:
- Financial settlements following divorce
- The family home and other property
- Savings, investments and debts
- Pensions
- Business interests
- Maintenance
- Clean-break orders
- Pre-nuptial and post-nuptial agreements
- Cohabitation arrangements
- Children’s financial needs
We can also help you understand how any proposed changes to family law may affect you as the Government’s plans develop.
The important thing is to obtain advice based on the law that applies to your circumstances now, rather than making decisions based on proposed reforms.
Frequently Asked Questions
The Government is considering changes to the law governing financial remedies following divorce and civil partnership dissolution. Its A Fairer End to Relationships consultation proposed changes including clearer statutory rules around sharing and needs, greater consideration of pensions and qualifying nuptial agreements. However, these proposals are not currently law. The consultation closed on 14 August 2026, so the existing legal framework continues to apply while the Government considers its next steps.
A Fairer End to Relationships is a Government consultation launched by the Ministry of Justice in June 2026. It considers reforms in three connected areas: financial remedies on divorce and dissolution, financial protections for cohabitants when relationships end, and inheritance rights for qualifying cohabitants when a partner dies without a Will. The consultation opened on 5 June 2026 and closed on 14 August 2026.
No. The Government’s proposals would establish sharing as a clearer starting principle for matrimonial property, but the proposals also recognise that financial needs can justify a different division. In practice, the Government acknowledges that many cases do not have enough assets to meet everyone’s needs through equal sharing. Children’s welfare and the financial needs of the parties would remain important considerations.
Pensions can already be considered as part of financial remedy proceedings. The Government is proposing that courts should be specifically required to consider pensions accrued during the marriage and pension needs when making financial orders. This could encourage more consistent consideration of retirement provision when couples divide their finances following divorce.
The Government is proposing the introduction of qualifying nuptial agreements. These could allow couples to make binding financial arrangements in advance of divorce or dissolution, provided specified safeguards are met. The proposals would still protect financial needs, including children’s needs. For now, the existing legal position regarding pre-nuptial and post-nuptial agreements continues to apply.
No. There is currently no equivalent general financial remedy framework for cohabiting couples when they separate. Depending on the circumstances, unmarried couples may need to rely on property, trust and other areas of law. The Government is proposing a new framework for qualifying cohabitants, but this is not currently law.
Potentially, if the proposed reforms become law. The Government is proposing a needs-based framework for qualifying cohabitants, with children’s needs considered first and the individuals’ housing, capital, income and pension needs considered afterwards, subject to available resources. The proposed framework would not use a 50/50 sharing principle in the same way as the proposed divorce framework.
You should obtain advice based on the current law, rather than waiting for proposed reforms. Financial settlements can involve property, pensions, savings, investments, debts, businesses and income, and the circumstances of every family are different. Early advice can help you understand what information you need, what options may be available and whether a negotiated settlement or court application is appropriate.
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