Looking for some guidance on what a likely financial split will be

Hi,

About to start negotiating with my stb ex on a financial settlement and would like some guidance on what a likely fair financial split would look like. I believe neither of us have any desire for this to go to court.

Providing details anonymously below and with as much context as possible:

Length of marriage 13 years
Two Children - Age 9 and 8 - live with both spouses on a shared care arrangement

Spouse 1:
41 years old
Lives in the marital home (mortgaged - current equity ~180k)
Take home income: 5.5k per month
Pension CETV: ~ 120k
4k savings
2k liability on car lease

Spouse 2:
36 years old
Made their own decision to leave the marital home a year ago - now living in a rented 3 bedroom house
Income 3.5k per month (includes universal credit, child maintenance from spouse 1, child benefits & part time jobs, including one with career growth potential)
No pensions
1.5k savings
6k car

Other Assets:
Children have their own Stocks & Shares ISAs plus Premium Bonds (assume these stay with them and are already in their own names) total ~£12k

Spouse 2 would like to buy their own home with the settlement money but may be limited mortgage wise - what is actually considered as part of "housing needs" ?

If any further details needed, please let me know! - Thanks

Spouse 2 has also said they believe they are entitled to spousal maintenance (solicitor advice). Views on this given the above details would be helpful too!

Housing needs would mean a suitable three bedroomed house.
If she has a three bed house now her needs are met but given your incomes buying one may well be possible?

What is the house you are living in like? If bigger than your needs that could be sold to release equity and you will have greater mortgage raising capacity than her.

Spousal maintenance is based upon need and ability to pay.
You are clearly a high earner but may well have high outgoings especially as you’re paying child maintenance. However can she demonstrate that she has a need for more than £3.5k per month and is maximising her income? Most people have to live on far less than that so it seems unlikely.

Are there definitely no other assets? No pensions and little house equity is unusual when you are both high earners.

1. Yes, spouse 2 would like to buy a 3 bed shared ownership home (which works with her income and mortgage affordability).

2. Spouse 1 is in a larger 4 bed house, the marital home and the children + Spouse 1 wish to stay there. Spouse 2 also knows that and would accept if Spouse 1 can raise additional mortgage to cover the settlement.

3. When you say maximising income, does that mean working full time or equivilent with multiple part time jobs? Spouse 2 is currently working 2 days per week, plus doing cleaning jobs (but as far as I know is not being reported, i.e. cash in hand or direct to bank) plus Universal credit, Child Maint. and Child benefit.

4. Pensions yes as detailed under Spouse 1 above. Spouse 2 has some pension (peanuts in size), but don't have exact figure to hand. Spouse 2 never really earned more than a few hundred pounds each month prior to the separation and Spouse 1 was basically the sole breadearner for the family but only had a significant pay rise following a job opportunity 2 years ago. Their salary was mostly in £30-60k range during the majority of the marriage. Moved houses 4 times and mortgage has increased quite a bit over time as a result, hence current level of equity is not that high.

How I see your ex’s income made up?
What plans does she have to go full time and will she need to do any re-training for this?
Have you both checked to see what your mortgage raising capacities are?
How much is a three bed house in your area?

Spouse 2 income is broken down as per original post above:

Income 3.5k per month (includes universal credit, child maintenance from spouse 1, child benefits & part time jobs, including one with career growth potential). She can get a higher hour part time job (i.e. 30 hours pw) in an area she's worked in before, or potentially extend hours in her current job, or just get another job that doesn't require training. She is also doing a lot of cleaning work but this seems to be cash in hand. They may not be fully disclosing it!

Spouse 1 mortgage raising capability is fine (i.e. could cover additional borrowing for a 40/60 or 35/65 split on the marital house.

Spouse 2 mortgage raising is limited to about £165k.

3 bed houses in the local area, range from lowest end £230k (not so pleasant area) to £300k + for a nicer area.

Spouse 2 has already looked at shared ownership as a better option to get something new, in a nicer area and without as much pressure on the mortgage.

Shared ownership tends to cost as much, or more, than simply buying and is more difficult to sell if you need to move.

You can fix mortgages for long periods if you want stability but the rent is almost certain to increase annually.

You would probably do better to give up all the equity in the FMH to minimise or avoid SM or work out some SM for a limited time, eg when youngest is 11..

Why isn’t your ex taking up the offer of the 30 hour per week job?