Difficult negotiation ahead

Hi,

I am going through a divorce that was initially supposed to be amicable, but apparently it's taking a dark turn now that we are discussing the financials (what a surprise...).
Here some data:

Place: London
My age: 52
Her age: 51
No kids, but long marriage (18 years)
My income: 110k£ (5.3k a month, after pension contributions. There may be a 10k yearly bonus)
Her income: 20k£ (1.5k a month) - halfway between part-time and full-time

Marital assets:
- Flat (400k value, 130k mortgage => 270k equity)
- 80k cash
- 150k pension (all in my name)

Given the income disparity, I proposed for her to take the flat, she'll pay the mortgage. I keep the cash and the pension. That would be slightly tilted in her favour. No spousal maintenance.

I was expecting her asking some more cash, but her counter-offer was very different, as she wants the flat but wants me to pay for the mortgage. What is more infuriating is that she is proposing 10 years SM of 1500£ a month, given the difference of the income.
First of all I am far from confident I'll manage to keep this level of income, as just 3 years ago I was making 70k. I think my pay is a bit above the market rate for my skills. Second, her SM request is equivalent to a capitalization of 180k£, which seems ludicrous, on top of her getting the whole 400k value of the flat.

Is her scary proposal realistic? What worries me is that the income difference is huge, especially if looked at before tax (mine is 5.5 higher before taxes, but only 3.5 times after taxes), so if we go to court a judge won't really be sympathetic toward with me, given my "high" salary. Accepting her proposal would leave me with:
* no house
* -130k mortgage to pay
* 80k cash
* 150k pension

* -180k of SM obligation

Basically my net worth will be negative at the grand age of 52/53, which means I have to start from zero.
If god forbids I have some health/employment problem I am doomed, even though I understand I can *try* to have the SM obligation changed in some circumstances.

I have an appointment with a solicitor next week, but I am too anxious now. I wonder if I am about to get a nasty reality check?

How big is the flat? You’ll each need a one bedroom place. If it’s got more than that you could argue it should be sold and you both downsize.

SM is based upon need of the recipient and ability to pay of the payee. What argument is she putting forward for needing £1500 a month tax free on top of her earned salary especially with no mortgage to pay?

Why does she need this for ten years? What is going to change at the age of 61 as state pension will still be six years off?

What is she doing to maximise her income and work full time?

Does she have any pension? Your pension values seem very low given your ages and incomes.

The flat has 2 bedrooms. Not sure how easy would be to convince her to downsize, as she's quite keen to stay there.

Her arguments for SM (duration and amount) are based on marriage duration and income difference respectively.

She is definitely not planning to work until 67 (neither am I to be honest), she works in a shop and apparently she has now back and neck pain.
I don't think she is very keen to work full time.

Her pension is almost non-existent, probably peanuts. But yes, I need to investigate this.

About me, I have never paid much into it (yes, I am an idiot). My income was quite lower until 5 years ago (~45k) and almost everything was paid into the house.

You seem to suggest that her requests are somehow ludicrous?

I wouldn’t say ludicrous but they should certainly be challenged. Equally your proposal of a Clean Break with a split 54% to 46% in her favour isn't realistic when you earn six times what she does. The extra £40k that she would have from the pot is less than eight months wages to you.

She WANTS to stay in the current flat but doesn’t NEED to so no reason why she should have more than is required to buy a suitable one bed flat. If she chooses to have more than this and it requires a mortgage then she should pay it from her own sources.

Have a look at her expenditure. Why does she NEED spousal maintenance?

How will she retire early if SM is ending and she has very little pension? It will take a lot of saving to have enough in ten years time to fund six years before state pension which would be approx half of her proposed SM anyway, and taxable! What were retirement plans before divorce and how was this going to be funded? Wanting to retire early is one thing but having sufficient funds to do it is another.

Ideally the court will be looking for a clean break order. Realistically your not going to keep the £80k savings and pension in exchange for the equity in the flat but the more she gets from the pot the less her chance of getting SM will be.

Thank you for your replies!

I think your questions are starting to put me a bit in the right mindset to think about the settlement, and hopefully prepared me for the talk with the solicitor.

If her housing is sorted, her expenses should be around 1k/month, if she gets 600£/month from state pension she'll have a 400£/month shortfall. That's where the 180k in SM she demands will be very handy. So, assuming she won't claim to need far more, she doesn't need SM in the short term, but she'll need a boost for retirement (even more since she aims to retire before 67).

We are both financially clumsy, our original retirement plan was to retire in around 10 years, thanks to my recent salary improvement.