The Duxbury Calculation is one way to finalise divorce financial remedy proceedings. In appropriate cases the so-called Duxbury Tables may play a significant part in working out what a recipient spouse should receive to settle their financial claim. The tables can be used whether your case is heard by a judge or whether you negotiate a private financial settlement that is then formalised in a Consent Order.
When Is Duxbury Used?
The Duxbury tables have several uses. Sometimes for example, they are used simply as a reference tool during financial negotiations to give the parties an idea of what a final financial settlement might look like. However the key feature of settlements and orders arrived at using the Duxbury Calculation is that they replace ongoing spousal maintenance payments with a lump sum. They are most effective therefore when the couple getting divorced – or the court – decide that there should be a clean financial break.
As we will see below, Duxbury Calculations are by no means appropriate in every case. They depend on various financial predictions and other assumptions. There is a risk therefore that the lump sum ordered using Duxbury will turn out to be insufficient to meet future needs. But in cases where the desire for a clean break outweighs other considerations, and there is sufficient capital to pay the lump sum required, a settlement or court order made using Duxbury provides certainty and enables the parties to move on with their lives post divorce.
Why the name ‘Duxbury’?
The term comes from the 1992 divorce case of Duxbury v Duxbury. There, the husband and wife had both formed new relationships and wanted a clean break. Their priority was to be able to face the future without the ongoing contact and potential for future conflict associated with indefinite spousal maintenance payments. Lawyers proposed a lump sum, and Mrs. Duxbury’s team produced a spreadsheet of figures that aimed to work out her lifetime income needs and the lump sum that would be required to satisfy them.
What does the calculation involve?
The Duxbury Tables are designed to produce a lump sum for investment. If the figure is correct, it should enable the recipient spouse to receive an income from the invested sum that would be equivalent to regular maintenance payments from a former spouse. The calculation takes into account a number of factors, including the recipient spouse’s age and life expectancy, annual income required by the recipient, future inflation, rate of investment return and future capital growth.
The calculations also make room for some use of the underlying capital by the recipient spouse. In the Duxbury case the assumption used to arrive at the lump sum figure was that the capital would all be used up by the time of Mrs Duxbury’s death.
Advantages of the Duxbury Calculation
As we’ve said, the main attraction of a Duxbury Calculation is that it gives the divorcing couple the opportunity of a clean break. A settlement reached in this way also provides financial certainty and largely eliminates the possibility of future disputes about spousal maintenance. The recipient spouse also benefits from a degree of financial freedom in terms of how to use the lump sum that they would not have if receiving maintenance payments at set intervals.
Risks of Using A Duxbury Calculation
As with any actuarial sum of this kind there is an element of unpredictability. It’s necessary to estimate factors such as life expectancy, future capital growth rate and inflation. In theory, if a recipient of a Duxbury-influenced lump sum lives longer than assumed in the initial calculation there would be no lump sum left from which to draw an income.
There is also a risk that invested sums will lose their value because of stock market fluctuation or that investment growth will be affected by poor financial advice over the long term. In addition, if inflation were to rise more than predicted the sum may not be sufficient to meet living costs.
Finally with the financial freedom that comes with receiving a lump sum comes the risk that the recipient will overspend or make unwise investment decisions and use up the funds too quickly.
One final criticism of the Duxbury rules is that, if applied rigidly – using the age and life expectancy of the recipient spouse as the basis for the calculation – a young spouse, divorcing after a short marriage will receive a larger sum than an older spouse who has had a long marriage and perhaps made a greater contribution to marital wealth. Judges will take account of this situation, known as the ‘Duxbury Paradox’.
Do I have to use the Duxbury rules?
No. But they are particularly useful when both parties want a clean break and there are appropriate assets of sufficient value to make the lump sum payment.
They can also be used to adjust previously made maintenance orders – although not to replace financial provisions previously set up for children.
Can I do the calculation myself?
In theory, yes. But if you are unused to what might be complex financial calculations it would be advisable to seek expert advice. Not just on the figure you might expect by way of a lump sum but also on the question of whether a Duxbury calculation and lump sum is suitable in your own circumstances.
The idea of a lump sum may be attractive but, as we’ve seen there will always be an element of uncertainty attached to a Duxbury calculation given the assumptions on life expectancy, future inflation and the return on your investment we have mentioned.
Are the figures set in stone?
The Duxbury tables and calculations are guidelines – but important ones. They are reviewed regularly by The Duxbury Working Party, a committee of family lawyers and former judges. In 2024, for example, the group published an extensive list of recommendations for changing the way the Duxbury rules are applied in practice. In particular, the group proposed that the Duxbury calculation should no longer use the life expectancy of the recipient as its basis. Such a change, said the committee, could end the existing unfairness where the recipient of maintenance would in some cases receive maintenance for a much longer period than they otherwise might have. Instead the court should consider how long the recipient would be entitled to maintenance if Duxbury was not being used and adjust the calculation accordingly.
Finally, as in every divorce, courts must have regard to fairness between the parties when reaching any decision on financial matters. And judges may always use their discretion under s25 of the Matrimonial Causes Act when deciding whether a settlement arrived at using Duxbury is ‘fair’ or whether the calculation needs to be modified in some way.