Divorce and Finances: Navigating Investments, Pensions and Savings

Tuesday 5 August, 2025

The process of divorce is never easy. It brings emotional challenges, legal complexities, and a great deal of uncertainty about the future. One of the most critical and often underestimated aspects of separation is the financial impact, particularly on investments, pensions and savings.

Whether you are considering divorce, are already in proceedings, or have recently reached a settlement, it is essential to understand how these assets are affected and to seek the right guidance to ensure you can move forward with clarity, security and confidence.

Understanding the Financial Landscape of Divorce

When a marriage ends, all assets accumulated during the course of the relationship must be identified and considered. This includes joint and individual savings accounts, ISAs, investment portfolios, workplace and private pensions, and other financial arrangements. Even if an asset is held in one partner’s name, it can still be taken into account as part of the matrimonial pot, depending on the length of the marriage and other circumstances.

The division of finances is rarely straightforward. It is influenced by a range of factors including the duration of the marriage, each party’s contributions (financial and otherwise), the needs of any children, future earning potential, and the standard of living enjoyed during the marriage.

Because these variables differ from one family to another, there is no universal solution, which is why professional and impartial financial advice is so vital.

Pensions: A Key Piece of the Settlement Puzzle

Pensions are often one of the most significant assets in a divorce, yet they are frequently overlooked or undervalued. Pensions can be divided in several ways, through pension sharing orders, pension offsetting (where one party retains the pension while the other takes an asset of equivalent value), or pension attachment orders (rarely used, but they direct pension payments to the ex-spouse once they come into payment).

Calculating the true value of a pension and understanding how it will provide income in retirement requires specialist knowledge. The process involves obtaining up-to-date Cash Equivalent Transfer Values (CETVs), considering defined benefit vs defined contribution arrangements, and analysing any safeguarded benefits or guarantees that could be lost on transfer.

Decisions taken at this stage can have lifelong consequences, so expert financial advice is not only recommended but, in many cases, essential.

The Importance of Fair and Informed Decisions on Investments and Savings

Savings and investment accounts, whether jointly or individually held, also come under scrutiny. The courts aim for fairness rather than equality, so assets may not necessarily be split 50:50. Transparency is crucial, and both parties are expected to make full and honest financial disclosures. Attempting to hide or minimise the value of savings or investment accounts can lead to penalties or an unfavourable settlement.

Understanding the tax implications of moving or dividing these assets, how market volatility might affect future values, and how to reinvest or rebuild after settlement all require a considered approach. Working with a regulated financial planner can help ensure that decisions are tax-efficient and aligned with longer-term financial goals.

Why Professional Financial Advice Matters at Every Stage

While solicitors will manage the legal aspects of divorce, they are not always qualified to give detailed financial advice. A regulated financial adviser, such as an Independent Financial Adviser (IFA), can work alongside your solicitor to provide clear, independent advice on pensions, savings, investments, and future financial planning. This collaboration helps ensure that your divorce settlement supports your financial wellbeing, not just today but in the years ahead.

Divorce can also bring practical changes to financial products and arrangements. You may need to update beneficiaries on life insurance policies, revise your will, or change the ownership structure of certain accounts. An experienced financial adviser will guide you through these tasks, making sure nothing is missed and helping you build a financial plan that is sustainable, resilient and tailored to your new circumstances.

Investment Planning for the Future with Compassion and Clarity

Navigating the financial consequences of divorce can be daunting, but it is possible to emerge with a renewed sense of financial stability and direction. Having someone by your side who understands the technical details, legal considerations and emotional realities of the process can make all the difference.

As Deb Nolan, Independent Financial Adviser at Lonsdale Services in Leeds and Bradford, explains:

“Divorce is never just about ending a relationship, it’s about beginning a new chapter. My role is to help clients see beyond the paperwork, and work towards a financial plan that gives them security, independence and hope for the future. Every situation is unique, so we take time to listen, understand, and provide solutions that truly reflect our clients’ needs.”

At Lonsdale Services, we are proud to provide compassionate, FCA-regulated financial planning and investment advice to clients going through divorce. If you would like to speak confidentially with one of our advisers, please get in touch with your local office today. With the right advice and support, you can take confident steps towards financial freedom and peace of mind.

Please note: A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available. The contents of this article are for information purposes only and do not constitute financial or legal advice. Past performance is not a guide to future performance.

Sources: fca.org.uk, moneyhelper.org.uk, gov.uk/divorce, resolution.org.uk, lawsociety.org.uk, plsa.co.uk, citizensadvice.org.uk

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