Making the most of divorce settlement cash: How your female clients can maximise their savings

Securing a financial settlement is a major turning point for your female clients going through a divorce. However, they might feel uncertain about what to do with any funds they receive – especially if this includes large sums of cash – due to:

• The emotional upheaval of the process
• A lack of financial knowledge and confidence
• Uncertainty about their future needs.

Yet, planning how to make the most of a financial settlement is crucial for both short- and long-term financial security.

If you have female clients who feel overwhelmed by suddenly being responsible for financial choices, or who aren’t yet ready to invest, read on to find out how they can maximise their cash savings.

Take a beat and consult a financial expert to avoid emotional decision-making

Being awarded a significant sum of money could be a daunting experience, especially for women who have previously relied on their partner for financial guidance and support.

Moreover, finalising a divorce settlement is a significant milestone that may trigger a range of emotions.

As such, your divorcing female clients should allow themselves space and time to consider how to make the best use of their settlement. Rushed decisions that are based on emotions, rather than data and logic, could lead to mistakes and regrets.

This is where financial advice could be valuable.

A financial expert can provide impartial, objective advice that helps your clients understand their new financial situation and make informed decisions about how to manage their wealth. As such, they may feel empowered to take control of their settlement and use it to progress towards their post-divorce financial and life goals.

3 practical strategies to help your divorced female clients maximise their cash savings

While investing is often a core part of long-term financial planning, recently divorced women may prefer to focus on what feels familiar and secure – typically cash savings – at least in the short term.

Here are three ways your clients can ensure that any cash savings they receive work as hard as possible for them.

1. Monitor and compare savings interest rates

Savings interest rates fluctuate in line with factors such as the Bank of England base rate, inflation, and the business needs of individual banks.

That’s why your clients need to continually monitor and compare interest rates on different accounts if they want to maximise their cash savings.

However, MoneyAge (27 May 2025) has reported that 35% of UK adults don’t track their finances closely enough to know how much their current or savings account earns.

If your female divorced clients don’t keep an eye on their cash and regularly look around for better deals, they could miss out on opportunities to grow their wealth and protect it from inflation.

In other words, they might not be making the most of their potentially hard-won divorce settlement cash, which could make it harder for them to build the lifestyle and security they desire.

Regular reviews with a financial expert could help your divorced female clients learn how to assess the performance of their cash savings and make data-driven decisions about where to keep their wealth.

2. Use the full annual ISA allowance to bolster tax-efficient savings

Your clients might not be aware that they could incur Income Tax at their marginal rate on savings interest earned outside an ISA wrapper, if they exceed certain thresholds.

Most basic-rate and higher-rate taxpayers have a Personal Savings Allowance (PSA) of £1,000 and £500 respectively in 2025/26. Any interest earned up to this threshold is tax-free. However, additional-rate taxpayers have no PSA.

As you can see, if your clients hold their divorce settlement cash outside an ISA, they could quickly exceed these thresholds and lose a chunk of their savings interest in tax.

Indeed, more people are now paying tax on their savings interest due to a combination of higher interest rates and a PSA which has remained frozen since it was introduced in April 2016. According to the Association of Tax Technicians (9 April 2025), an additional 893,000 savers could pay tax on their cash savings by 2028/29.

On the other hand, returns from ISAs are free from Income Tax and Capital Gains Tax, provided they do not exceed £20,000 in total (2025/26). Any withdrawals you make will generally be tax-free too.

So, your female divorced clients could maximise their tax-efficient cash savings by using their full annual ISA allowance each tax year.

3. Consider spreading cash savings across different types of accounts

There are various types of savings accounts your clients can choose from, including:

• Regular saver accounts
• Fixed-rate accounts and bonds
• Notice accounts
• Easy access savings accounts.

These accounts are designed for different purposes, and each offers its own advantages and disadvantages.

For example, regular saver accounts typically offer higher interest rates in exchange for a commitment to deposit a fixed amount each month. This could help your clients build a regular savings habit post-divorce and allow them to grow their wealth at a faster rate.

In contrast, easy access accounts usually allow unlimited withdrawals and deposits, giving your clients flexibility and the reassurance that they can access their money whenever they need it. However, interest rates may be lower than for regular saver accounts, fixed-rate accounts (which lock funds away for a fixed period) and notice accounts (which require notice before making a withdrawal).

Spreading their cash settlement across various savings accounts could allow your clients to benefit from the different advantages that each one offers. They could also align access and interest rates with specific financial goals.

This might seem like a lot of work for someone newly divorced. Fortunately, there are platforms, such as Insignis, that can make it much simpler to diversify cash savings.

Insignis allows users to compare and manage accounts from different providers in one place, allowing you to secure the highest rate of return on your savings.

What’s more, the platform is regulated by the Financial Conduct Authority (FCA) and it provides protection from the Financial Services Compensation Scheme (FSCS).

The FSCS protects up to £85,000 of eligible deposits if your clients’ UK-authorised bank, building society, or credit union fails. This limit applies per person, per financial institution. As such, Insignis provides a convenient way for your clients to spread their savings across various providers – keeping no more than £85,000 with each one – to ensure they benefit from FSCS protection.

If you have clients who might be interested in signing up for Insignis, I’d love to hear from them. I can talk them through how the platform works and help them sign up for a reduced fee. True Financial Design receives no fees or commission for referrals; I just know how helpful this tool could be for you, and your female divorced clients.

You might like to read and share the to learn more about the benefits of this platform.

Get in touch

If you’d like to learn more about how we can work together to help your divorcing female clients make the most of their settlement, I’d love to hear from you.

To find out more, please get in touch by email at lottie@truefinancialdesign.co.uk or call 03300 889138.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Approved by 2plan wealth management Ltd 23/09/25.