What is fair?

I'd appreciate some guidance on how to do the right thing. I've had a handful of mediation sessions with my STBXW and it's become apparent that she had done a lot less research about divorce than I have, doesn't really understand the finances and gets completely lost during mediation. We have 3 children, the youngest of whom is six, and it's important to me that we are therefore civil and can both offer stable homes. I have no interest in "winning" my divorce or coming out better than my STBXW, I just want an outcome that is fair to both of us. The divorce is amicable and although I would prefer a Clean Break so that we can both have certainty and stability into the future, the first priority is the children.

My dilemma however is that although we mutually agreed to divorce, my STBXW doesn't really understand the law, is reluctant to get legal advice and although she tries to lay down conditions on what she wants her post-divorce to be like she won't engage with how that can be achieved. This puts me in an awkward position where I find myself having to suggest all the solutions, for each one to be refused for one reason or another.

Details are as follows:

H41, earns £90k
W40, earns £15k part time and term time only (stayed at home for 7 years, has recently finished a degree)
Children x 3 (ages 12, 9 and 6)
Assets: FMH £380k (net equity of £110k after selling fees), Pensions (about £200k), Other including cars (about £25k)
Liabilities: £260k mortgage, loans of about £12k

The main issue is the FMH. My STBXW doesn't want to stay in the FMH as she agrees it will be too expensive when the mortgage needs to fix again but she also could not afford to buy anything cheaper that she thinks is suitable because her earnings are so low (with CM we estimate she could get a £150k mortgage, so a budget of £260k if she got all the equity). There are various houses that have enough bedrooms in a 5 mile radius for about £250k but my STBXW has rejected them on various grounds (e.g. outside catchment, ex-council estate, too far from work) and she could also increase her earnings by working full time to get her mortgage capacity up to about £200k (so able to buy something she thinks suitable for £300k) but she also refuses to do this (e.g. "who will cover school holidays," "I don't want to use childcare" etc).

I'm willing to give her all of the equity in the FMH in return for a larger share of the pension (I probably need an actuary for an exact split, but let's say 75/25 split of pension) but she won't compromise on anything, insisting she would rather carry on doing her current role and renting a suitable home if she has to. It feels like if I agree to stay on a mortgage with her this will drag on for over a decade until our youngest is 18 as she won't do anything to improve her earnings or release me. Then when the day comes that she has to sell up and release me (and probably give me 30-40% of the equity to avoid an egregiously unfair outcome to me) she'll be back at square one and older, when it will be too late for her to increase her earnings or remain a homeowner.

I guess my question is whether she's in this predicament because I'm being unfair or whether her position is unreasonable?

You are quite right that the priority is secure and stable housing for minor children.
When does the fixed rate expire? Could you delay sale of the FMH until then?
What degree has she got? Could that lead into better paid employment in future?
What are the arrangements for the children? How is care being shared?
Is there a way of making adjustments so she doesn't need to work term time only?
Would she get help with rent via benefits?
Might one option be for you to retain the FMH (perhaps transfer into your sole name) and her to rent at least until the end of the mortgage term or maybe longer? A Mesher order can work both ways. If she doesn't wish to buy now, you could agree on a percentage she will get further down the line and either buy her out or sell and divide the proceeds.
I think the thing here is for the mediator to explore what she wants and why she's apparently rejected your proposals. You have a lot more flexibility if you can agree something between you. Ultimately if you cannot agree in mediation you could explore legally binding arbitration or may have to ask the court to help resolve matters.

Hadenoughnow

I think what I need to figure out is what is likely to happen if it does go to court? I know that can be unpredictable but would I be far wrong to think whilst she would be the priority for housing (split 9/5 per fortnight to her) at the same time if it was determined she could buy suitable housing without a Mesher Order or keeping me on the mortgage by 1) increasing hours and 2) moving to a cheaper area she would be expected to do so and given a settlement that reflects that?

I'm really not keen on Mesher Orders at all as they delay the inevitable, whoever is occupying the family home. Nor do I like the idea of court as I can't help feeling it would go very wrong for one of us when what I really want is a fair compromise. I have to co-parent and want to keep things civil.

A court can’t force her to buy a house if she prefers to rent.

Are you sure about the mortgage amount as a lot of lenders won’t take CM into account.

The mortgage amount was what I was advised by a specialist broker for her circumstances. That was a few months ago so I have another meeting with them tomorrow to ask about any changes.

Also, I think she would prefer to own but isn't taking the steps to make that possible. My question, I guess, is who is going to take the hit for her refusal to increase her earnings if it ended up in court, me or her?

I suspect that with the disparity in incomes the court may well consider spousal maintenance - although a lot will depend on what she can claim in benefits to supplement her income. If SM is ordered it may be time limited to say when the youngest starts secondary school at which point it may be considered reasonable for her to increase her working hours. Given the age of the youngest child, part time working supplemented by benefits is unlikely to be seen as a problem. Court ordered SM may help her obtain a mortgage sufficient to buy something suitable. I don't think a court would be keen for children to be made to move a long way from schools and friendship groups if it could be avoided.
Even where there's an unequal split in equity, pensions may still be split to allow for equal incomes in retirement.

Hadenoughnow

I would hope spousal maintenance would not apply in our case as - for the spousal maintenance to actually benefit her - I think it would lead to a grossly unequal standard of living between our households.

First, I should explain I work for a retail bank that sells mortgages. We would lend less on spousal maintenance than we would on universal credit because we would see the government as a more reliable payer. So paying spousal maintenance to my ex-wife that reduced her universal credit claim would actually mean we would lend her less.

Second, as a result that she chooses not to maximise her earning capacity (because even if she can only work part time, she is very recently degree educated but chooses to do a job someone with no GCSEs could do) she can indeed claim significant benefits. It's something in the region of £7.5k a year in universal credit on top of £2.5k in child benefit. UC is lost £ for £ when spousal maintenance is paid, so I would have to pay an awful lot of spousal maintenance before she actually saw any benefit (a court might prefer that I pay the price for her refusal to maximise her earning capacity rather than the state, but it wouldn't be in her interests because of the first point and we don't want to go to court anyway).

Third, as we have three children I am already paying a lot of child maintenance (£1.2k a month). I also have quite significant housing needs of my own because, again, we have three children.

Fourth, there are a lot of costs associated with my job. The commute is £550 a month. I work in head office and I'm expected to dress to an extremely high standard, probably another £1k a year on suits, ties and shirts.

If you do the maths, once I have paid taxes (£33k), commuting (£6.6k), child maintenance (14.4k), dress code costs (£1k) I'm left with £45k. I'm also likely to liable for all our joint unsecured debts which are quite high (my salary has almost doubled in the last two years, since separation, so the lifestyle in the marriage was significantly lower). This amounts to about another £6k a year for the next 3 years. So £39k left to live on.

In contrast, she earns about £14k net then gets £7.5k in universal credit, £2.5k in child benefit and £14.4k in child maintenance, in total about £38.4k. Considering she's getting the lion's share of equity and a pension share as well, I hardly think it would be considered fair to give her spousal maintenance on top of that especially given the slightly negative impact it will have on her earning capacity.

If I paid her spousal maintenance to a level that she actually benefited from it, not only would the disparity in our respective household incomes be huge (something like £700 a month) but I also wouldn't be able to afford to rent suitable housing to have my children, let alone buying a place. In fact, I'd get into debt in that situation and be better off not working and living with my parents (who live a long way from any decent jobs) claiming benefits. It's not something I would choose to do but I could be left with no choice!

However, luckily, we've worked together to formulate quite a different plan and we're just talking to mortgage brokers now and it's looking good. I will return to explain the option if it all works out.