pension

‘Breadwinner’ is a term often thrown about with little consideration for its meaning. Traditionally, the ‘breadwinner’ in a relationship was the man as it was assumed that whilst the husband went out to work, the woman would keep house and raise the children.
However, as society has moved on and gender roles changed, the breadwinner could be either party, or there may not be one at all. It may also be that most of the money in the relationship has come from one partner, for example from inheritance or the result of house sales or a business.
So, what happens if you are the lower earner in your relationship? Money worries may be at the forefront of your mind when considering divorce or separation. Questions like ‘Can I afford to live by myself?’, ‘How will I afford divorce?’, ‘What will happen to the house?’ and many more may be concerning you.
However, if you are not the ‘breadwinner’ in your relationship, you still have a safety net in divorce.
In divorce, the Court will work from the starting point of a 50/50 split of finances and assets. A financial settlement is an agreement which will iron out financial issues and fairly separate the assets once a marriage has ended.
In brief, a Court will look at the future income and earning capacity as well as the needs of each party going forward. If you are not the breadwinner i.e. you’re the lower earner or have no income, this will be taken into consideration in the financial settlement.
However, it is also important to remember that spouses are not automatically entitled to an equal share of their partner’s income.
Who pays the legal fees?
One of the first concerns may be about who pays the legal fees in divorce. The general rule is that each partner will pay their own legal costs. The cost of divorce includes the court fee of £593, plus any solicitors’ fees should they be instructed.
The person applying for the divorce – known as the applicant – will pay the court fee. If the application is a joint one, applicant 1 will pay the fee.
You can find out more about who pays the legal fees in divorce here.
Financial Disclosure and Spousal Maintenance
Financial disclosure happens early on in divorce proceedings, usually through the completion of a Form E, and should be an honest setting out of the finances and assets of the marriage. Once the forms have been filled in, there is time for the ex-spouses and the solicitors to ask questions.
Providing everything has been disclosed properly, an agreement can then be made on the future needs of each spouse.
The court will then review the agreement and decide whether it is fair.
In situations where one spouse has a much higher income than the other, there is likely to be an extended period of financial support, known as Spousal Maintenance. This can be decided between you and your partner, or the court can order the financially stronger party to pay the other a monthly income. It is expected that both parties should have a similar standard of living after the divorce that they did prior to divorce.
Spousal maintenance is only available for couples who were married and tends to be more common for divorcees who were married for a long time.
Spousal maintenance is available for both men and women, as it depends on who was the breadwinner in the marriage. Traditionally, men paid women spousal and/or child maintenance. However, social changes and modern-day working lives mean that either the husband or the wife in heterosexual marriages can pay maintenance costs.
In same-sex marriages, the same applies in that either party can be the breadwinner and will therefore be required to pay the financially weaker party some form of ongoing income.
Some couples opt for a ‘clean break’, wanting to cut all financial ties with their partner as soon as possible. To obtain a clean break, you must have a financial order approved by the Court, which also prevents your partner making any financial claims against you in the future.
Pensions
Pensions are often ignored in divorce proceedings, especially when the individual has sought no legal advice. However, they are one of the most important aspects in the financial part of divorces but can be complicated.
As with divorce generally, one party is not automatically entitled to an equal share of their partner’s pension.
Pensions are complicated, particularly so in divorce, so it is important to seek legal advice, especially if you are the lower earner.
What’s the best option?
What’s ‘best’ is unique to the individual and their circumstances. The most helpful thing to do is to seek advice from a family lawyer who will be able to guide you through the options and help make that decision.
The most important thing to remember is even if you are not the breadwinner in your relationship, financial settlements and the court will take this into account.
If you are separating, but not divorcing, because you and your partner never married, a Separation Agreement is likely to be an option for you. This document, whilst not legally binding, can be used to formally document the division of assets and finances, including pensions as well as child arrangements and other considerations. More