Government publishes consultation on financial remedies on divorce and financial provision for cohabitants

The Government has published its long-anticipated consultation on the reform of the law relating to financial remedies on divorce and financial provision for cohabitants on separation and intestacy.

The consultation sets out the reforms that the Government is proposing, and invites views from interested parties upon those proposals.

So far as the financial remedies reforms are concerned, these comprise primarily two things: firstly, codifying the principles that have been established in case law over the 50-odd years since the present law was enacted by parliament, and secondly making qualifying nuptial agreements binding.

The law that is used to determine how financial settlements on divorce are decided is contained in the Matrimonial Causes Act 1973. Whilst there have been some changes to the Act since then, most notably perhaps giving the courts the power to make orders in relation to pensions on divorce, the law has essentially remained the same ever since.

And the Act purposely does not set out any ‘hard and fast’ rules as to how settlements are decided, rather only giving guidelines, and leaving judges with a wide discretion as to what orders they make.

Whilst this wide discretion has the benefit that judges can tailor their orders to the circumstances of each particular case, it has led to two things: firstly, it has meant that the courts have tried to formulate rules, to help judges in deciding how to exercise their discretion, and secondly, it has meant that there can be considerable uncertainty over outcomes, making it more difficult to advise, and to settle cases.

Two particular rules formulated by the courts relate to “needs” and “sharing”.

The ‘sharing principle’ states that, as a general guide, an equal division of assets between husband and wife should be departed from only if, and to the extent that, there is good reason for doing so.

As to needs, where the equal division of assets does not meet the financial needs of the parties, in particular in relation to income and housing, the judge may depart from equality to ensure that those needs are met.

The Government is proposing that these rules be codified into statute, to make the law more certain.

As to nuptial agreements (both pre-nuptial agreements and agreements made after the marriage), the current law, as laid out by the Supreme Court, states that the court will uphold them unless it is unfair to do so. The Government is proposing that, provided certain conditions are met (particularly to ensure that a party is not coerced into signing the agreement), agreements should be binding, thereby reducing uncertainty as to whether an agreement will be upheld.

So far as cohabitants are concerned, the Government is making two proposals.

Firstly, the Government is proposing that eligible cohabitants be given similar rights and protections on relationship breakdown to married couples, enabling them to seek financial provision from their former partners. It should be emphasised that the Government is not envisaging that cohabitants be given the same rights as married couples – the amount they receive would be based upon needs, assessed more narrowly than on divorce, and the sharing principle would not apply. To be eligible, the couple must have lived together for a minimum of three years, or have a child. The couple would be able to agree to opt-out of these rights and protections, if they wish.

The second proposal relates to the law on intestacy, when someone dies without making a will. Under the present law, cohabitants have no automatic right to inherit when a partner dies without a will. The Government is proposing to change the law so that qualifying cohabitants receive the same intestacy rights as spouses. It has been suggested that the couple would have to live together for a minimum of five years to qualify.

The consultation closes on 14 August 2026. If you wish to take part, you can find the consultation here.

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