Family on beach holding hands, mother, father, child

The Government has launched a consultation on reforming the financial consequences of relationship breakdown in England and Wales.

In what is one of the most significant reviews of family financial law in recent times, the consultation brings together:

  • Financial remedies on divorce
  • Financial provision for cohabitants on separation
  • Inheritance rights for cohabitants on intestacy

The proposals aim to make outcomes at the end of relationships clearer, more consistent and better aligned with modern family life.

Financial remedies on divorce: improving structure and predictability

The current law on financial remedies on divorce derives from statute dating back to 1973, overlaid with decades of case law. While the courts are well‑versed in applying the principles, the system is often criticised for being opaque and unpredictable.

The Law Commission’s 2024 scoping report identified the cost and acrimony that the law’s underlying uncertainty can cause. The consultation takes from that work and proposes a “codification‑plus” approach, which would:

  1. Put well‑established principles from case law into statute, rather than leaving them to be inferred from judgments.
  2. Retain the existing judicial discretion, but within a clearer statutory framework.
  3. Introduce focussed reforms where the law is currently unsettled.

At the heart of this approach is the continued application of the overarching sharing and needs principles. It includes:

  • Clear statutory definitions of matrimonial and non‑matrimonial property
  • Sharing matrimonial property equally by default.
  • A structured approach to needs, with children’s needs coming first before  housing, income and pension needs.
  • Greater emphasis on pension sharing.

This is not a radical shift from existing approaches, however the codification of these principles should reduce the prospects of dispute and promote earlier settlement where marriages breakdown.

Qualifying nuptial agreements

The consultation revisits a long‑running debate around whether nuptial agreements should be made legally binding, provided strict safeguards are met.

Under the proposed model, qualifying nuptial agreements would generally be binding and not subject to the court’s discretion. Crucially, a couple would not be able to contract out of meeting each other’s (and their children’s) needs.

The safeguards underpinning a qualifying nuptial agreement would include the need for:

  1. Full financial disclosure.
  2. Independent legal advice being taken by both parties.
  3. Execution as a deed.
  4. A prohibition on last‑minute agreements shortly before the wedding.

Again, this would be an effective codification of existing norms underpinning the drafting of nuptial agreements. Significantly, it would bring English law closer to that of many other jurisdictions while preserving the existing protections in England around needs.

For professional advisers, this change, if implemented would only serve to strengthen the force of recommendations they make to their clients to consider nuptial agreements as a tool for wealth planning.

Cohabitants on separation

At present, cohabitants who separate have no dedicated family law framework. Property disputes are resolved through a patchwork of trust and land law, while financial claims for children are dealt with separately. This often leaves the more economically vulnerable partners exposed.

The consultation acknowledges the issues with the existing legal framework and invites views on a statutory scheme for eligible cohabitants.

The proposed model is deliberately narrower than that for divorce. Its key elements include:

  • Eligibility limited to committed, interdependent relationships after three years of  cohabitation, or sooner where there is a child.
  • A needs‑based approach, with no automatic sharing of assets.
  • Legal ownership as the starting point, subject to an adjustment to ensure needs can be met.
  • As with the proposals in relation to divorce, children’s welfare is the first consideration.
  • Ongoing maintenance only in exceptional time‑limited circumstances.

This would represent a significant change to the existing law, providing cohabitants with access to family‑style claims, but only to the extent necessary to avoid hardship.

Cohabitants on death: reforming intestacy

The third strand of the consultation addresses a longstanding anomaly through which cohabitants have no automatic right to inherit on intestacy. The Government is proposing:

  1. Extending intestacy rights to qualifying cohabitants, potentially aligning them with spouses and civil partners.
  2. Providing surviving cohabitants priority to administer an intestate estate.
  3. Broadening access to financial provision claims where cohabitants have children together.

Why these reforms matter

Whilst divorce, separation and death are very different events, they all raise the question as to how financial responsibility should be allocated when relationships end. Through consulting on all three topics together, the Government is attempting to update and define rules better reflective of modern family structures that prioritise the needs of the vulnerable at the same time as preserving autonomy and choice.

The consultation closes on 14 August 2026 and is open to the public. You can share your views on the proposals here.