Fair Shares? Sorting Out Money and Property on Divorce
Published: 27/03/2023 09:45
For the 100,000 couples who divorce annually in England and Wales, the financial arrangements they make can determine the future standard of living that they and their children will have. Yet, only a third of them use the legal system to reach a financial settlement, with the remaining two-thirds negotiating their own arrangements or, worse, reaching no settlement at all.1 Despite numerous calls to reform the law on this issue, very little is known about the detail of how couples negotiate settlements, or of how these work out.
The ‘Fair shares? Sorting out money and property on divorce’ research study is in the process of investigating how divorcing couples in England and Wales negotiate financial arrangements. It involves an online survey of over 2,400 people who have divorced within the previous 5 years, and in-depth interviews with a further 50 divorcees. It will provide the first detailed, fully representative picture in England and Wales of how finances and property are divided on divorce, importantly including information both on couples who do and do not make use of the legal system. It also includes a short online survey with a representative sample of the general public, measuring public understanding of the law in relation to financial remedies.
The purpose of this article is to explain the importance of the research, its aims and methods, and the key contributions we will be making to the evidence base on financial settlements on divorce.
The importance of the research study
There is little detailed information about the kinds of financial arrangements couples currently make when they divorce, or the impact and effects of different arrangements. Whilst existing research provides evidence about the effects of divorce and separation on ex-spouses’ income levels, notably the differential negative impact on women and children compared to men2 and the fact that resultant financial hardship and economic and housing insecurity are associated with poorer child outcomes,3 we know little about the financial outcomes experienced by the majority of the divorcing population, the kinds of arrangements agreed (or imposed by the stronger party), or the relative effects of different arrangements. This study aims to start to fill this gap, collecting quantitative survey and qualitative interview data from a sample of recent divorcees. It will include both divorced couples who did and did not use the courts, those with and without children and from the full range of socio-economic backgrounds. The goal is to capture the lived complexity of arriving at and experiencing post-separation and divorce financial arrangements and to identify precursors to particular outcomes. This will be achieved by providing robust, nuanced data for professionals and policy-interest groups on the experiences of divorcees. We hope that the research will improve practice through a greater understanding of what happens across the whole divorcing population and provide a benchmark for any future legal changes. We also plan to archive the data to facilitate further analysis by the research community.
As part of the divorce process, couples can decide to have a formal financial settlement, agreed by the parties or court-imposed. However, of the roughly 100,000 couples who divorce in England and Wales each year4 only around 40,000 seek a financial remedy and only a third leave the marriage with a court order.1 This is the group we already know a bit (but not a lot) about. Of this cohort, increasing numbers of family litigants in private law cases have no legal representation.6 Between 12 and 15% of such cases end up as contested hearings in court and around two-thirds come to court as agreed settlements.7 Over four-fifths of court-sanctioned arrangements are for ‘clean break’ settlements with no ongoing financial support payments for a former spouse. Where such payments are made, they are almost always for wives taking care of dependent children.8 Fewer than 20% of financial remedy cases disclosing relevant pensions include any pension orders.9 The consequences of this for women are particularly severe, but there is limited quantitative data on processes and outcomes in these cases and nothing at all about how these arrangements are worked out in practice.
Even more importantly, we know very little about the arrangements of the other two-thirds of divorcing couples who do not use the courts. While longitudinal survey data provide information on income levels post-divorce,10 we do not know how parties’ relative incomes might sit within a wider financial settlement, nor the workability of any outcome. Survey data11 provide information about ongoing child maintenance, including both arrangements formally agreed through court or statutory systems and those agreed between the separated parents outside the legal space. But we know nothing about how assets are divided and the trade-offs between ongoing support, including pension provision, and ‘clean break’ agreements for this population. Nor do we know how frequently arrangements are reached by default and force of circumstances rather than by design; how they are negotiated; how workable they are; and what leads to varied outcomes.
This lack of evidence – both basic prevalence figures and a nuanced and dynamic understanding – is problematic particularly as there has long been a view that the law governing post-divorce finances needs overhauling.12 Moreover, there is a very strong policy priority of encouraging private ordering of family legal disputes, coupled with the abolition of legal aid for most family law matters. Without robust evidence regarding how negotiations and arrangements are managed, whether made with or without legal assistance, and what the consequences are for families and children,13 there is no firm evidence base from which the legal profession and policymakers can discuss and assess what, if any, substantive and/or procedural changes might be required.
The study addresses three broad research questions: What are the financial and property arrangements that have been made? How do divorcing couples arrive at their financial and property arrangements? What are the immediate effects of those arrangements?
Given our research questions, the study necessarily involves both quantitative and qualitative data collection in two stages. An online survey of a representative sample of recent divorcees provides prevalence figures of different arrangements for different populations and quantitative measures of the routes they took. An in-depth study of a purposively selected interview sample is collecting more nuanced and detailed information on the arrangements, a deeper understanding of individuals’ experiences, assumptions and rationales when making these arrangements and the immediate practical and financial effects of these.
The prevalence of different financial arrangements is being measured via an online survey of a representative sample of over 2,400 divorcees whose decree absolute had been granted in England and Wales within the previous 5 years, carried out by the survey organisation YouGov among eligible online panel members. The survey provides the detail of divorcees’ different arrangements and how they have started to work out in practice.
The survey took place over the summer of 2022. The final survey questions were the result of an extensive development process, involving pilot interviews with recent divorcees and consultation with our academic and practitioner Advisory Group. As a result, the questions in the 15-minute survey were closely aligned to our research questions, worded in ways which we knew that divorcees would understand and relate to.
In broad terms the survey covers arrangements concerning any matrimonial home, pensions, savings or investments, any debts, and any ongoing payments to the ex-spouse or children. It also includes questions on the child arrangements, the negotiation process and the involvement of any professionals, how fair the outcome was perceived to be by the participant at the time and currently, and how well any arrangements have worked. With the survey including a range of information about the couple and their family before and since the divorce, our analysis will be able to look at the prevalence of different financial arrangements for different groups. We are particularly interested in differences between those who did or did not use the legal system; between those with different income or asset levels prior to divorce; and those with and without children. We will identify the predictors of reaching a financial settlement, and of different types of arrangement (individually and in combination), exploring in particular the relationship between financial and child arrangements, and the extent to which the arrangements are associated with the involvement of any professionals.
The interview sample
This phase involves 50 semi-structured interviews carried out between late Autumn 2022 and early Spring 2023. Matching the eligibility for the survey, the interviewees were all divorcees whose decree absolute was granted within the previous 5 years. They were purposively selected to include both those who have and have not used the court, a range of ages, both genders and those with and without children. Each interviewee has also been asked to complete the online survey prior to the interview. In light of the experience of the COVID-19 pandemic, all interviews are being conducted virtually and are lasting approximately one hour.
These interviews are essential in gaining a more nuanced understanding of individuals’ financial and property arrangements, how they arrive at these and capturing outcomes which flow from their earlier decisions. In-depth interviews complement the survey by providing detailed information on experiences, drivers and trajectories. For example, we are exploring the main driver of decision-making in relationships where there has been domestic abuse and the route taken (if any) to arrive at property and financial settlement; how far a lower or precarious household income affects the ability of parties to re-house, finance two households going forward and/or pay child support or the willingness of couples to access professional advice or legal services.
We are currently in the process of analysing the survey data and completing the qualitative interviews. The full research report, integrating the survey and interview findings, is due for publication in Autumn 2023, alongside a range of other publications.
It is hoped that the findings from the research study will enable policymakers and policy-interest groups to design reform proposals based on a better understanding of the range of experience of divorcing couples and their families, and the ongoing economic and emotional impact on them of the arrangements they reach. Further, we hope that the findings from the research will equip advice-providers and support groups to better support divorcees who do not use the family justice system by describing the range of financial arrangements that are reached and identifying particular problems and hardships that divorcing couples may experience. Finally, we plan to archive all quantitative and qualitative data gathered for this project in order to maximise potential impact and usability.
To keep up to date with the research and future publications, please follow us on Twitter at (@shares_fair) or email the research team (firstname.lastname@example.org) to be placed on our stakeholder mailing list.