Protecting Your Children Financially During a Divorce

Beyond child maintenance and living arrangements, divorce raises a set of financial planning questions specifically about children that are easy to overlook amid the wider settlement negotiations - from savings accounts to school fees to simply protecting them from financial stress they shouldn’t have to carry.

Checking and protecting existing children’s savings

If your children have a Junior ISA or Junior SIPP (see our Saving and Pensions series articles on these), confirm who the registered contact is and ensure contributions continue as planned if that was part of your family’s financial routine - these accounts belong to the child, not either parent, and shouldn’t become entangled in the wider matrimonial asset division, but do need someone to keep actively managing them going forward.

Addressing school fees explicitly, if relevant

Private school fees are not covered by standard CMS child maintenance (see our dedicated article on what CMS maintenance does and doesn’t cover) - if children are in fee-paying education, this needs to be explicitly addressed as a separate matter in the financial settlement, ideally with a clear agreement about how ongoing fees will be split and what happens if one party’s financial circumstances change.

Life insurance to protect maintenance commitments

If one parent is paying significant ongoing child maintenance or spousal maintenance, consider whether life insurance (potentially written in trust, see our Inheritance series article on why this matters) should be part of the settlement, specifically to protect the receiving parent and children’s financial position if the paying parent were to die during the maintenance period.

Reviewing wills and beneficiary nominations

Divorce doesn’t fully update an existing will (though marriage does currently revoke an old one in England and Wales - see our Inheritance series article on wills and second marriages) - once the divorce is finalised, an ex-spouse named as executor or beneficiary is treated as if they had died, but nothing changes while you are only separated, so an outdated will needs to be reviewed and updated promptly, and pension death benefit nominations (see our Pensions series article on inheriting a pension) should be checked and updated to reflect who you actually want to benefit now, particularly if children are involved. If you go on to remarry, a postnuptial agreement (see our dedicated article on whether these actually hold up in court) can also be a useful way of ring-fencing assets for children from your first marriage, separately from whatever a new spouse might otherwise be entitled to.

Keeping financial arrangements age-appropriate and separate from children

While not a strictly financial tip, family and child psychology guidance consistently advises against involving children in the financial details of a divorce, or using them as a channel for financial disputes between parents (for example, discussing money problems in front of them, or asking a child to relay financial messages) - keeping financial negotiations firmly between the adults protects children from stress that isn’t theirs to carry.

Setting up separate, clearly labelled accounts if managing shared child-related costs

Some separated parents find it useful to maintain a dedicated joint account purely for agreed shared child costs (school trips, activities, clothing) - funded by both parents to an agreed formula - rather than relying on ad hoc reimbursement requests, which can become a recurring source of friction.

Considering the tax and benefit implications of the new household structure

Separating into two households changes several things worth reviewing: eligibility for benefits like Universal Credit may change based on new individual (rather than joint) household income, and each parent should check their own eligibility independently rather than assuming their prior joint assessment still applies.

The bottom line

Protecting children financially during a divorce goes beyond the headline maintenance figure - checking existing savings accounts, explicitly addressing school fees, reviewing wills and pension nominations, and keeping financial disputes firmly between the adults all genuinely matter, and are easy to overlook amid the larger asset and property negotiations.