A new consultation setting out the Government’s proposals to reform the law governing financial arrangements and protections when relationships end in England and Wales has recently been published.
What Is the Aim of the Consultation?
The consultation seeks views on reform across three areas:
- Reforming financial remedies on divorce and dissolution
- Introducing protections for cohabitants on separation; and
- Reforming the law for cohabitants on intestacy.
The proposals are underpinned by four guiding principles: prioritising fair outcomes for children, protecting the vulnerable, providing a clear and accessible framework, and preserving the distinct status of marriage.
Part 1: Financial Remedies on Divorce
The Government is inviting views on a ‘codification-plus’ model of reform, which would bring established case law principles, such as needs and sharing, into statutory form. The Law Commission’s 2024 scoping report found that the current highly discretionary approach under the Matrimonial Causes Act 1973 (“MCA”) lacks clarity, certainty, and accessibility to an extent that could be considered inconsistent with the rule of law. In 2023, there were 103,816 divorces and dissolutions in England and Wales, and in 2025 around 50,000 people applied to the court for financial remedy orders.
Key elements of reform include the introduction of qualifying nuptial agreements (“QNAs”) that would be legally binding, enabling couples to make binding financial arrangements in advance of divorce or dissolution. However, what does this mean in light of Radmacher? It would provide couples with the certainty that Radmacher promised but ultimately failed to deliver. As for Helliwell v Entwistle – where the parties signed their prenuptial agreement on a picturesque beach in the Seychelles – QNAs would introduce mandatory disclosure requirements specifically designed to prevent the kinds of issues that arose in Helliwell.
Furthermore, the Government is also exploring whether courts should give greater weight to the impact of domestic abuse, including controlling or coercive behaviour and economic abuse, when assessing finances. There is also a focus on ensuring pensions are properly considered, given that only 11% of divorcees currently make a pension-sharing arrangement despite pensions being among the most valuable assets couples own. The consultation also considers whether there should be wider powers for the courts to make financial orders for children aged 18 and over, and whether there should be time limits on spousal maintenance.
Part 2: Protections for Cohabitants on Separation
This is perhaps the most significant development. The Government proposes introducing a new statutory framework of rights and protections for eligible cohabitants at the point of separation. There are now around 3.5 million cohabiting couples in the UK, more than double the figure 30 years ago. At present, cohabitants must rely on complex and costly property and trust law routes not designed for relationship breakdown.
The proposed eligibility criteria would require cohabitants to have lived together for at least three years or share a child, and the court must be satisfied the couple were in an enduring family relationship. Children’s welfare would be the first consideration of the court when determining financial provision for eligible cohabitants on separation. Crucially, the framework would offer narrower protections than those available on divorce, balancing the need to protect the vulnerable while upholding the distinct nature of marriage.
Nearly half of people (47%) wrongly believe that living together creates a “common law marriage” providing protections on separation or bereavement, which underlines the need for reform.
Part 3: Cohabitants and Intestacy
Cohabitants currently have no automatic right to inherit when a partner dies without a will. The main route to financial provision under the current law is a claim under the Inheritance (Provision for Family and Dependants) Act 1975, which can require lengthy and costly litigation. The consultation proposes giving cohabitants automatic rights to inherit if their partner dies intestate, reducing stress and financial insecurity. These proposals draw on the Law Commission’s 2011 report advocating reformed inheritance rights for cohabitants.
Key Considerations
1. Greater certainty in financial outcomes
If the Government adopts the “codification-plus” model, statutory principles governing needs and sharing could make financial remedy outcomes more predictable and reduce the scope for lengthy and costly litigation. However, clients with substantial assets should be aware that a more structured framework may limit some of the flexibility that currently exists under the court’s broad discretionary powers.
2. Increased importance of pre- and post-nuptial agreements
The proposed introduction of binding QNAs would represent a significant change to the current law. Couples wishing to protect assets, family wealth, business interests, or inheritances should consider taking advice on pre- or post-nuptial agreements at an early stage, as these agreements may become an increasingly effective tool for managing financial risk.
3. New rights and responsibilities for cohabiting couples
The proposed reforms could fundamentally change the legal position of unmarried couples. Cohabiting partners may acquire statutory rights and obligations on separation, making it important to understand both the protections available and the potential financial consequences. Couples may also wish to consider cohabitation agreements to provide greater clarity and certainty.
4. The impact of domestic abuse on financial settlements
The consultation proposes giving greater weight to the effects of domestic abuse when determining financial outcomes. This could be particularly significant in cases involving coercive control, economic abuse, or other forms of abusive behaviour. Individuals who have experienced abuse may find that the financial consequences of that abuse are more directly recognised within the legal framework.
5. Changes to inheritance rights for cohabitants
Proposed reforms to the intestacy rules would extend automatic inheritance rights to certain qualifying cohabitants. This may affect estate planning decisions and could alter how assets pass on death where no valid will is in place. Both cohabiting couples and those undertaking succession planning should review their arrangements in light of any future changes.
6. A greater focus on pensions on separation
The consultation also proposes requiring courts to specifically consider pension needs when resolving financial claims. Given that pensions are often among the most valuable assets in a relationship, separating couples should ensure they understand the potential implications of pension sharing, offsetting, and valuation, particularly where there is a significant disparity in retirement provision between the parties.
