How cashflow modelling can expose the hidden weaknesses in a divorce settlement

Fewer couples may be divorcing, but more of those who do are taking their finances to court. There were 49,067 applications for financial remedy in the family courts during 2025, the highest figure since 2010, according to Ministry of Justice data obtained by law firm Nockolds. That represents a 22 per cent increase from 40,081 in 2022.

The rise hasn’t been driven by a divorce boom. Divorce numbers have fallen since the spike following the introduction of no-fault divorce in 2022. What has changed is the number of separating couples seeking a formal answer to the rather important question of who gets what. Romance may end quietly; unresolved money rarely shows the same restraint.

Rising living costs, mortgage payments and uncertainty about future financial security mean more people are unwilling to leave matters open. Even couples with modest assets are seeking court-approved settlements to secure a clean break and protect themselves against future claims. Others who divorced after no-fault divorce was introduced are now returning to complete the financial arrangements they left unfinished.

Saving on legal fees through an informal agreement can look attractive during an already expensive separation. It looks rather less clever when somebody discovers years later that ‘informal’ also meant ‘unenforceable’.

Kaja Viknes, senior associate at Nockolds, said: “Rising living costs, mortgage pressures and uncertainty about the future mean that divorcing couples simply cannot afford to leave their finances unresolved. There was a trend for informal separations to save money on legal fees but increasingly that is a false economy.”

She added: “Informal financial agreements are incredibly fragile. They might feel convenient at the time, but they offer no real protection. We are seeing more people discovering, often years later, that what they thought was an ‘agreement’ simply is not enforceable.”

A fair split on paper may not work in real life

Divorce involves legal decisions, but it also creates a sizeable financial planning job. Clients need to understand what a proposed settlement could mean for their future income, housing costs and retirement. Pension sharing can dismantle plans built over decades, while investments, protection and estate planning may all need rebuilding around a very different life.

Cashflow modelling is particularly valuable here. A settlement can look perfectly fair on paper while leaving one person short of income later, or holding assets that don’t meet practical needs. Advisers can show clients the longer-term consequences before signatures are added and the options become harder to reverse.

The work may include valuing financial assets, modelling competing settlement proposals, reviewing pension-sharing arrangements and rebuilding the post-divorce plan. There’s plenty of technical detail, usually arriving while the client is dealing with the considerably messier human side of separation.

The Timebank can take on the research, calculations and suitability reports behind that advice. You get more time for the client conversation; we’ll wrestle with the numbers.

Leaving the finances politely unresolved is increasingly proving to be an expensive way to save money.