Financial mediation on divorce
Key facts
- Financial mediation helps divorcing or separating couples agree how to divide property, pensions, savings, debts and income.
- It starts with full and frank financial disclosure and ends with two written documents: a memorandum of understanding and an open financial statement.
- The court’s approach to fairness is set out in section 25 of the Matrimonial Causes Act 1973, and mediators work with the same factors.
- Nothing you agree is binding until a court approves it. A solicitor turns the agreement into a consent order sealed by the court.
- Where possible, the aim is a clean break, so that neither of you has a financial claim against the other in future.
When a marriage or civil partnership ends, the money has to be sorted out as well as the arrangements for any children. Who keeps the house? What happens to the pensions? How are savings, debts and income divided so that both of you can move on? Financial mediation is a calm, structured way to answer those questions together, with an impartial mediator guiding the conversation rather than a judge deciding for you.
This is a pillar guide. It explains what financial mediation covers, how disclosure works, the legal principles that shape a fair outcome, and how a mediated agreement becomes legally binding. Each section links to a more detailed page. For the wider picture of the process itself, see our guide to how family mediation works. This page is general information, not financial or legal advice.
What does financial mediation cover?
Financial mediation covers everything that needs dividing or deciding when a relationship ends. That usually means the family home and any other property, pensions, savings and investments, income and maintenance, debts, and sometimes a business. The mediator helps you build a full picture of what you both have, then work through the options for splitting it fairly.
The process is voluntary and you keep control of the outcome. The mediator does not take sides or tell either of you what to accept. They give you legal and financial information so you can make informed decisions, and they write up what you agree. Many people also take their own legal advice alongside mediation, which is sensible where large sums or pensions are involved.
| What is divided | Examples |
|---|---|
| Property | The family home, buy-to-let or second properties, and any equity in them |
| Pensions | Workplace, private and, in some cases, the additional State Pension. Often the largest single asset |
| Savings and investments | Bank and savings accounts, ISAs, shares, premium bonds and other investments |
| Income | Earnings, and whether spousal or child maintenance is needed and affordable |
| Debts | Mortgages, loans, credit cards and other borrowing in joint or sole names |
| Business interests | A company, partnership or self-employment that one or both of you own |
You do not have to decide everything at once, and you can cover children and money in the same mediation. For a broader view of what mediation can deal with, see what mediation can cover.
Disclosure comes first
You cannot divide what you have not measured. Financial mediation starts with full and frank financial disclosure, where each of you sets out everything you own, owe and earn. This covers property, pensions, savings, debts and income, backed up by paperwork such as payslips, statements and pension valuations. Disclosure has to be complete and honest. Hiding assets can unravel an agreement later, even after a court has approved it.
Our financial disclosure checklist lists the documents most people need to gather. Mediation uses voluntary disclosure modelled on the same headings as the court’s Form E, without the sworn court process, which usually makes it quicker and less stressful than a contested court case.
How does the law decide what is fair?
There is no fixed formula that splits everything fifty-fifty. Instead, the court starts from the assets available and applies the factors in section 25 of the Matrimonial Causes Act 1973. Mediators use exactly the same factors as a guide, so that any agreement you reach would stand a good chance of being approved by a judge. The first consideration is always the welfare of any child of the family under 18.
The section 25 factors the court weighs are:
| Section 25(2) factor | What it means |
|---|---|
| (a) Resources | The income, earning capacity, property and other financial resources each of you has now or is likely to have |
| (b) Needs | The financial needs, obligations and responsibilities each of you has or is likely to have, including housing |
| (c) Standard of living | The standard of living the family enjoyed before the breakdown |
| (d) Age and length | The age of each of you and how long the marriage or civil partnership lasted |
| (e) Health | Any physical or mental disability of either of you |
| (f) Contributions | The contributions each has made or is likely to make, including looking after the home and caring for the family |
| (g) Conduct | Conduct, but only where it would be unfair to ignore it. It rarely changes the outcome |
| (h) Lost benefits | The value of any benefit one of you will lose the chance of acquiring, such as a pension |
Under section 25 of the Matrimonial Causes Act 1973, the court must have regard to all the circumstances, with first consideration given to the welfare of any child of the family under 18. Section 25A adds a duty to consider whether a clean break is possible, so that financial ties between the parties end as soon as the court thinks it fair. Non-court routes like mediation are encouraged, but the section 25 factors are the same benchmark of fairness whether a case settles in mediation or is decided by a judge.
Needs, sharing and compensation
Judges and mediators often describe the section 25 factors through three ideas. Understanding them helps you see why an outcome might not be a straight fifty-fifty split.
Needs is usually the starting point and often the finishing point too. In most families the money has to stretch to house and support both people and the children, so needs, especially housing, drive the outcome. Sharing reflects the idea that the assets built up during the marriage are, in principle, shared equally, though needs can justify a departure from equality. Compensation is rarer. It recognises a real economic disadvantage one partner took on for the family, for example giving up a career to raise children.
In practice, most everyday cases turn on needs. Sharing and compensation matter more where there are surplus assets beyond what both people need. A mediator can help you see which of these ideas applies to your situation, without telling you what to settle for.
The big-ticket items: home, pensions, maintenance and debts
A few assets tend to dominate the conversation. The family home is usually the largest asset people can see, and the options range from selling and dividing the proceeds to one of you buying the other out, or a deferred sale so children can stay put. Pensions are often worth even more than the house, yet are easy to overlook. They can be shared, offset against other assets, or made subject to an attachment order.
Where one person cannot meet their needs from a share of the capital, spousal maintenance may bridge the gap, though courts now lean towards a clean break and time-limited support. Debts need dividing too, and joint debts stay the responsibility of both named people until they are refinanced or settled. If either of you owns a business, it is disclosed and valued, and usually kept by the owner with an offset elsewhere. Each of these has its own detailed guide.
What do you get at the end of mediation?
When you reach agreement, the mediator writes it up in two documents. The first is a memorandum of understanding, which sets out what you have agreed. It is written on a without prejudice basis, which means it cannot be used against either of you if the case later goes to court. The second is an open financial statement, a summary of the finances you both disclosed. Unlike the memorandum, this one is open, so it can be shown to the court and to solicitors.
Together these two documents give you and your solicitors everything needed to turn the agreement into a binding court order. The memorandum records the deal; the open financial statement shows the figures it was based on.
How does a mediated agreement become legally binding?
Mediation itself does not produce a legally binding financial settlement. On its own, a memorandum of understanding is not enforceable. To make a financial agreement binding on divorce, you ask the court to approve it as a consent order. A solicitor drafts the order from your memorandum, you both sign it, and a judge checks that it is fair before sealing it. The current court fee to apply for a consent order is £62.
Once sealed, the consent order is binding and enforceable, and it dismisses future financial claims to the extent you have agreed. This is the step that gives a mediated agreement its legal force. Our guides on making an agreement binding and on using a solicitor after mediation explain how the two roles fit together.
Aiming for a clean break
A clean break ends the financial ties between you, so that neither can make a claim against the other’s income, capital or pension in future. The law positively encourages it. Section 25A of the Matrimonial Causes Act 1973 asks the court to consider whether a clean break is possible in every case.
A clean break is not always achievable straight away. Where one person needs ongoing support, there may be maintenance for a set period, with a clean break to follow. But wherever the finances allow, mediation aims to leave you both financially independent, with the settlement recorded in a consent order and, ideally, a clean break built in. If you are weighing mediation against a contested court case, our mediation versus court cost calculator gives a rough comparison.
What if you cannot agree everything?
Mediation does not require you to settle every point in one go, and it does not fail just because one issue proves difficult. Often couples agree most of the finances and narrow the gap on the rest, which makes any further step quicker and cheaper. Where a sticking point remains, a mediator can suggest ways forward, such as obtaining a joint valuation or a pension report, so a decision rests on facts rather than assumptions.
If agreement genuinely cannot be reached, mediation is not wasted. You will have completed disclosure and clarified the real issues, which carries straight over into the next step. That step might be another form of non-court dispute resolution, or an application to court for a financial order. Our guide on what happens if mediation does not resolve everything sets out the options without pressure either way.
Is financial mediation right for your situation?
Financial mediation suits most separating couples, including those who are amicable and those who find talking difficult, because the mediator manages the conversation and keeps it balanced. It works for married couples, civil partners and, for property and children questions, unmarried couples too, though the legal framework for unmarried couples is different.
It is not suitable in every case. Where there has been domestic abuse, or one person feels unable to speak freely, safety comes first, and a mediator will screen for this before any joint session. Even then, options such as shuttle mediation, where you stay in separate rooms, can sometimes make the process safe and workable. Before mediation begins, each of you attends a MIAM, a short individual meeting where the mediator checks that mediation is safe and suitable for you.
Rob and Lena had been married for 14 years and owned a house with a large mortgage, two workplace pensions and modest savings. Rob assumed a fifty-fifty split of everything; Lena, who had worked part-time to raise their children, worried she would be left unable to rehouse. In mediation they completed full disclosure, including up-to-date pension valuations that showed Rob’s pension was worth far more than either had realised. Working through the section 25 factors with the mediator, they agreed Lena would keep a larger share of the equity to meet her housing needs, balanced by Rob retaining more of his pension. The mediator recorded it in a memorandum of understanding and an open financial statement, and their solicitors turned it into a clean break consent order.
Frequently asked questions
Is financial mediation legally binding?
Not on its own. Mediation produces a memorandum of understanding, which is not enforceable by itself. To make a financial agreement binding on divorce, a solicitor turns it into a consent order that a judge approves and seals.
Does everything get split fifty-fifty?
No. There is no fixed formula. The court and mediators apply the section 25 factors, and in most families the outcome is driven by needs, especially housing, rather than a straight equal split.
Do we both have to give full financial disclosure?
Yes. Full and frank disclosure is the foundation of a fair agreement. Both of you set out everything you own, owe and earn, backed by paperwork. Hiding assets can undo an agreement later.
Can we sort out children and money in the same mediation?
Yes. Many couples cover both. The mediator can help you reach a parenting plan and a financial agreement in the same series of sessions, though the money side usually needs full disclosure first.
What is a clean break?
A clean break ends all financial claims between you, so neither can make a future claim on the other’s income, capital or pension. The law encourages it wherever the finances allow, and it is recorded in a consent order.
Sources
- Matrimonial Causes Act 1973, section 25 and section 25A, legislation.gov.uk. Accessed 9 July 2026.
- GOV.UK, Money and property when you divorce or separate, gov.uk. Accessed 9 July 2026.
- GOV.UK, Apply for a consent order, gov.uk. Accessed 9 July 2026.
- Family Mediation Council, What is family mediation?, familymediationcouncil.org.uk. Accessed 9 July 2026.