A FINANCIAL advisory firm is warning that the new no-fault divorce laws could lead to rushed financial settlements and unfair sharing of wealth. 

Since April 6, married couples in England and Wales are now able to start divorce proceedings without blaming a third party. 

The changes have made the divorce process simpler, with spouses unable to contest a divorce once the other party has applied for one.

However, Path Financial - the first national financial advisory firm in the UK set up specifically to tackle the climate crisis – is warning that speedier divorces could lead to rushed financial settlements.

Brighton-based Casey Goodwin, financial planner at Path Financial, said the change was "the biggest shake-up in divorce law in half a century" .

She said: "While it brings with it many benefits, it would be unfortunate if a by-product was that even fewer divorces were accompanied by a fair sharing of the couple’s overall wealth - in particular of pensions, ISAs and other investments.

“So often, these are the last things anyone really wants to think about, but care needs to be taken to ensure that the fair distribution of wealth is not overlooked in the rush to push proceedings through.

“Unfortunately, women are more likely to be negatively impacted financially when it comes to divorce, as there is a tendency to have lower savings and investments than men. This is largely because we are more likely to work part-time, become stay-at-home parents or care for elderly family members.

“At Path Financial, over 50 per cent of our clients are female, and we often see the impact of divorce on women, who can suddenly find themselves overwhelmed with increased financial responsibility or taking care of finances that they may not have previously dealt with.

“I would encourage anyone facing divorce proceedings to look closely at their finances - this is especially important for those who do not earn as much as their spouse. 

“It will help them secure their financial future. 

“And remember, whilst divorce is the ending of a marriage or civil partnership, the financial settlement is still very much a separate part of the process.”

With this in mind, Path Financial has put together list of financial pointers for those going through a divorce:

1. Find out what assets you and your spouse share

This may sound obvious, but many people – women in particular - are unaware what money and assets they jointly, or even individually, own and where they are held. 

It is important to know exactly what you have before divorce proceedings start, so having full and frank conversations about the value of assets and income is key to achieving the best outcome.

2. Do not assume that you’re not entitled to your spouse’s assets

For example, just because your name is not on the mortgage, it does not mean you have no rights over the property.

3. Consider the ‘cooling-off’ period as a positive – not a pain

There is now a period of 20 weeks between starting proceedings and going through with your divorce application - meaning a divorce will take at least six months or more to complete. 

4. Work out what you want financially from your divorce

Plan for what you need rather than react to what you’re offered. 

Does the settlement include mortgage payments being covered, provisions being made for your pension, or being able to pay energy bills once you begin to rely on a single income?

5. Work with a financial adviser - not just a solicitor

Solicitors do not have the detailed knowledge of the investment options open to you and the pros and cons of moving money from where it is already held, whether that is in trust funds, pensions or ISAs.

6. Take time to process

Divorce is generally stressful and unsettling and can trigger many emotions. But working with advisers who share your values – and understands your situation - can really relieve worries you have over your settlement and future finances.

7. Make sure your advisers listen to you

8. Do some good with your money

Use the fresh start to review how – and where - you invest your post-divorce money. 

If your investments were previously unethical, in the likes of oil, tobacco or in Russian companies – now is the time to do something about it.