Upcoming Consultation on Divorce, Financial Remedies & Cohabitation Reform

There are currently three major developments in family law in England & Wales that are likely to affect anyone considering separation, divorce or cohabitation. The reform signals being made by the Law Commission, the Ministry of Justice (MoJ) and Parliament are important to understand now, both in terms of current rights and future planning.

What has been announced?

• The Ministry of Justice has confirmed that it will launch a consultation “by spring next year” on financial provision on divorce and cohabitation reform.
• The Law Commission’s scoping report (December 2024) found that the current law governing financial remedies on divorce and dissolution “does not provide couples with a cohesive framework… to secure fair and sufficiently certain outcomes”.
• The Law Commission identified a number of specific areas for consideration, including:
  • Whether pre-nuptial and post-nuptial agreements should become binding.
  • The role of pensions in divorce settlements (often an overlooked area) and how they should be treated.
  • Whether maintenance payments should have a time limit and how adult children (over 18) might be taken into account.
• Separately, members of the House of Lords have urged the MoJ to make pre-nuptial agreements binding.

Why this matters for clients

1. The law on financial remedies may be overhauled

The current law is built around the Matrimonial Causes Act 1973 (MCA 1973) (and the corresponding provisions for civil partnerships), which has remained broadly unchanged for over 50 years.

The Law Commission found that because the law is heavily reliant on broad judicial discretion, outcomes can be unpredictable and may promote dispute rather than settlement.

For clients, this means that while the current law still applies, the consultation and future reform could change how assets, pensions, maintenance and other financial matters are dealt with.

In practical terms, if you are separating now, you should act under the current law, but do so aware that future reform may affect expectations and timing.

2. Prenuptial and postnuptial agreements may gain greater certainty

Historically, in England & Wales, nuptial agreements have not automatically been binding: the courts may uphold them if entered into freely, with full disclosure, and if they are fair.

Peers in the House of Lords have urged the government to legislate to make such agreements binding, subject to safeguards, whilst the Law Commission’s report suggests that any reform of financial remedies law would likely include a re-examination of nuptial agreements. These calls echo the Law Commission’s findings that clearer, binding rules around nuptial agreements could promote fairness and reduce litigation. If this happens, then for couples entering a marriage/civil partnership, or those with substantial assets, the utility of such agreements may increase — and the standards for enforceability may become stricter (e.g., full disclosure, independent legal advice, timing, fairness).

3. Cohabitation rights and reform go hand in hand

The MoJ’s consultation is not only addressing divorce and financial remedies but is also looking at cohabitation. This is significant because couples who live together (but are not married or in a civil partnership) currently have far fewer protections. At present, there is no such thing as a “common-law marriage” in England & Wales – a misconception that often leaves separating cohabitants unprotected.

Because reform is being dealt with proactively (rather than piecemeal), it is a good moment to review your position, whether you are married, in a civil partnership, or cohabiting.

4. Planning ahead becomes more important

Because reform is on the horizon, this is a good time to review your arrangements now — rather than waiting until the law changes. If you are entering into marriage/civil partnership and have assets or business interests, you may wish to consider nuptial planning now (or review existing agreements). Similarly, if you are considering separation, it could make sense to act under current law rather than wait and risk uncertainty.

For cohabitants, the landscape may change: whilst rights may increase in future, existing rights remain limited.

What you may wish to do now

If you are married or in a civil partnership and considering separation, divorce or dissolution:

• Gather full details of your assets, pensions, debts, and future needs/claims (including maintenance).
• Review any existing separation or divorce plan to see how it stands under current law, and whether accelerating or delaying it makes sense in light of potential reform.
• If you are cohabiting (without being in a marriage/civil partnership) and are either considering separation or planning to cohabit:
  • Consider whether cohabitation agreements, wills or other protections are appropriate given the current limited rights.
  • Consider how reform might change your position in future — but don’t rely on reform before taking steps now.
• If you are planning to marry or enter a civil partnership and have significant assets (or business interests):
  • Consider whether a nuptial agreement is appropriate now; we can discuss how it might be structured to reflect current best practice (even while the law remains unsettled).
  • Consider how any agreement might need to be reviewed or reinforced if future law changes.
• Stay informed. When the consultation is published, we will advise clients specifically how the proposed reforms might affect your situation.

What is still uncertain

• The exact content of the MoJ’s consultation, we do not yet know the detailed questions the Government will ask or which options they will favour.
• Although the MoJ has said the consultation will be published ‘by spring,’ the subsequent legislative timetable and implementation dates remain unclear.
• Whether any changes will apply retrospectively (unlikely) or only to new cases after a cut-off.
• How new law will interact with existing arrangements (for example, nuptial agreements drafted now, separation plans in progress, or pre-existing cohabitation agreements).
• How long any reform process will take. As the Law Commission has indicated, reform is needed, but changing a framework built on a 50-year-old statute is a substantial task.

Conclusion

In summary, the legal landscape for divorce, financial remedies, nuptial agreements and cohabitation in England & Wales is in a state of change. The MoJ’s consultation, the Law Commission’s scoping report and parliamentary pressure all signal that reform is more than just talk. While your current rights remain as they are under existing law, this is an ideal moment to ensure your affairs are in order and that you are strategically positioned either to act now or to adapt as change comes.

If you would like to review your current situation in light of these developments, do not hesitate to get in touch with one of our expert family law solicitors so we can help you assess how the possible reforms may impact your separation, divorce or cohabitation planning, whilst working proactively with you to protect your interests.