What Is the Section 25 Exercise and How Does a Judge Decide Finances?

When a family court judge decides how to divide the finances in a divorce, they do not apply a fixed formula. Instead, they work through a structured exercise under section 25 of the Matrimonial Causes Act 1973. Understanding how this works helps you understand how your case might be assessed.

What Is the Section 25 Exercise?

Section 25 sets out a checklist of factors that the court must consider when deciding what financial order to make. The judge weighs all of these factors together and reaches a conclusion about what fairness requires in the specific circumstances of the case. No single factor automatically trumps the others.

The Section 25 Factors

The factors the court must consider are the income, earning capacity, property and other financial resources of each party, including resources they are likely to have in the foreseeable future. This includes pension assets and any inheritance that is realistically in prospect.

The financial needs, obligations and responsibilities of each party, both now and in the foreseeable future. Housing needs are a central part of this assessment, particularly where there are children.

The standard of living enjoyed by the family before the breakdown of the marriage. This is particularly relevant in high net worth cases.

The age of each party and the duration of the marriage. Short marriages are treated differently from long ones.

Any physical or mental disability of either party.

The contributions made by each party to the welfare of the family, including any contribution made by looking after the home or caring for the family. Non-financial contributions are given equal weight to financial ones.

The conduct of each party, where it would be inequitable to disregard it. Conduct is rarely relevant unless it is serious.

The value of any benefit that either party will lose as a result of the divorce, most commonly pension rights.

What Is the First Consideration?

The welfare of any minor children of the family is the court's first consideration. This does not mean it overrides everything else, but it is the starting point and means that housing solutions that work for the children will be prioritised.

Summary

The section 25 exercise requires the judge to weigh all financial and non-financial factors in the round and reach a fair outcome for both parties. There is no formula. The welfare of children is the first consideration. Needs, contributions, and the duration of the marriage are usually the most influential factors in most cases.

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