What Is a Duxbury Calculation?

Key Points:

A Duxbury calculation is used to work out a lump sum to meet a spouse’s future income needs after divorce.
It is typically applied where ongoing spousal maintenance is not appropriate or desirable.
The calculation assumes the lump sum will generate investment income and be gradually spent over time.
Factors include age, life expectancy, inflation, tax, and investment returns.
Courts often use standard tables, but each case requires individual judgment.
The method aims to strike a balance between fairness, financial independence, and reasonable risk.
It is often used in higher-value divorces, but can also apply in more modest financial cases.

Introduction:

Financial settlements in divorce can be complex, especially when one spouse will need continuing support but there is a desire—or necessity—to avoid ongoing maintenance payments. In such cases, the courts in England and Wales may use a tool known as the Duxbury calculation. This allows the court, or the parties, to work out a single capital lump sum that is intended to replace periodical spousal maintenance payments over time.

But while the idea sounds simple enough, the Duxbury method brings with it a number of assumptions, variables and risks that need careful consideration. Far from being a one-size-fits-all solution, the Duxbury approach must be handled with precision and professional judgement—especially as it can influence financial independence and long-term security.

So what exactly is a Duxbury calculation, how is it used in divorce cases, and what should separating spouses—and their advisers—know about it?

Understanding the Duxbury Calculation

The Duxbury calculation is named after the 1992 Court of Appeal case Duxbury v Duxbury. The case concerned a divorcing couple where one party was to receive a lump sum in lieu of ongoing maintenance. The court needed a method to calculate a fair lump sum that would provide the recipient with income for life, while preserving the principle of a clean break.

The solution was to estimate how much capital would be needed, assuming it would be invested, and that some capital and interest would be drawn down each year, allowing the recipient to live off that money until their death. At the end of their life, the capital would be exhausted—hence it is sometimes called a “diminishing fund” approach.

This method has since become a familiar tool in financial remedy proceedings, widely used by family law solicitors, barristers and judges, often supported by specialist software or pre-calculated tables.

When Is a Duxbury Calculation Used?

A Duxbury calculation is most commonly used when:

One spouse is financially dependent on the other.
There is a desire to avoid ongoing spousal maintenance orders.
The financially stronger party prefers a clean break rather than indefinite payments.
There is sufficient capital available to make such a lump sum viable.

It is often seen in cases where one party has not worked for some time (for example, due to caring responsibilities), or is close to or beyond retirement age, and will not have the means to support themselves without assistance.

Key Assumptions in the Duxbury Model

Duxbury calculations are based on various economic and personal assumptions, including:

Life expectancy of the recipient (based on actuarial tables).
Annual income required (usually net of tax).
Anticipated investment return on the lump sum.
Inflation rates, to account for rising living costs.
Income tax, to reflect how investment returns are taxed.

These factors are used to work out how much capital is needed today to produce the desired income stream over the recipient’s remaining lifetime.

For example, a 55-year-old woman who needs £25,000 a year for the rest of her life might need a lump sum of around £500,000–£600,000, depending on the assumptions used.

Courts often use standardised Duxbury tables, which have been developed in conjunction with actuaries and updated over time to reflect economic conditions.

Advantages of the Duxbury Approach

There are several reasons why courts and lawyers may favour a Duxbury calculation:

It supports the principle of a clean break, where financial ties are severed after divorce.
It provides certainty to both parties.
It reduces the scope for future disputes about maintenance variation.
It allows the paying party to discharge obligations upfront, rather than face indefinite payments.

For the recipient, a lump sum may also provide more control and flexibility, allowing them to invest, spend, or use the funds as they see fit.

Potential Drawbacks and Risks

Despite its advantages, the Duxbury approach is not without problems:

1. Investment Risk

The Duxbury model assumes the lump sum will be invested wisely and will perform in line with predictions. In reality, markets fluctuate, and poor investment decisions could lead to the fund running out prematurely.

2. Longevity Risk

If the recipient lives longer than expected, they may outlive the Duxbury fund. This is a particular concern as people live longer and retirement costs rise.

3. Inflation and Cost of Living

Assumptions about inflation are just that—assumptions. A sustained rise in the cost of living could erode the value of the income over time.

4. Behavioural Risks

There is also the possibility that the recipient might spend the money too quickly or fail to invest it appropriately, leading to future financial difficulties.

For these reasons, the court must be satisfied that a Duxbury-style settlement is suitable for the individual’s needs and circumstances.

Discretion of the Court

Although Duxbury tables are widely used, they are not binding. The court retains a wide discretion under section 25 of the Matrimonial Causes Act 1973 to consider all the circumstances of the case, including:

The age and health of each party
The standard of living during the marriage
The financial needs, obligations and responsibilities of each party
The duration of the marriage
The contributions (financial and non-financial) made by each party
The conduct of the parties
Any benefits one party may lose due to the divorce

If the court considers that a strict Duxbury calculation would be unfair—either too generous or too limited—it may adjust the figure accordingly.

Alternatives to the Duxbury Method

In some cases, ongoing spousal maintenance may still be more appropriate—especially if the paying party’s finances are uncertain, or the recipient’s needs are expected to change over time.

Other options include:

Term maintenance orders, with or without a section 28(1A) bar to extension
Lump sums in instalments
Property adjustment orders that secure housing without creating large cash funds

A skilled family solicitor will explore all available routes before recommending a Duxbury approach.

Wrapping up

While Duxbury calculations offer a structured and familiar method for converting maintenance needs into a capital lump sum, they are not simply a matter of plugging numbers into a formula. Behind every figure lies a set of assumptions—about life expectancy, investment returns, future inflation—that may or may not reflect reality.

What matters most is that the solution is fair, realistic, and tailored to the needs of both parties. A Duxbury award can offer autonomy and closure—but it also demands financial discipline and, ideally, sound financial advice after the settlement.

For separating couples in England and Wales, understanding whether a Duxbury calculation is appropriate involves more than understanding how it works. It requires a thoughtful look at each person’s future financial life—how much they need, what they can manage, and what they may not foresee. Only then can the clean break be truly clean, and the settlement stand the test of time.

If you have any questions regarding this article, please call our office today on 02476 231000 or email enquiries@askewslegal.co