Divorce and Pensions Explained

Pensions on Divorce

When couples are separating and going through a divorce, their immediate concern will be about where they are going to live, rather than thinking about their retirement. 

It is easy to overlook pensions, as retirement can seem a long way off, and you may be more concerned about how your immediate housing and income needs will be met.

After the family home, pensions are likely to be the most significant asset. Ignoring the family’s pensions can leave many people, particularly women, in a worse financial position after the divorce. 

Advice Now has also published a survival guide to pensions on divorce, which you can read for more information. 

The guide provides some useful information about dealing with pensions on divorce and includes information about the following:

• The different types of pensions. 
• How to find out what your pensions are worth.
• When to get advice from a pension on divorce expert.
• How to reach an agreement.

Pension Sharing on Divorce

In proceedings for divorce, nullity, or dissolution of a civil partnership, the court has the power to share pension savings between the parties.

The first step is to find out how much the pensions are worth. Both parties need to obtain the cash equivalent value of all pensions. Not all pensions are alike. Defined Benefit Schemes, such as public sector workplace pension, have valuable benefits which need appropriate assessment and valuation by a single joint expert pension actuary to ensure that the pension is shared equally and fairly.

 There are several options available when dealing with pensions. The pensions can be shared by way of:

• A pension attachment order (which are rare).
• Pension sharing order.
• Offsetting- which means instead of securing a pension sharing order, the non-member spouse receives other assets in lieu.

There are many different types of pension schemes, pension benefits and ways of contributing to and funding pension schemes. Pensions are complex, and it is important that you seek specialist legal advice early on. 

Here to Help

If you would like further information on how we can help or have any more questions on pensions on divorce, please do not hesitate to contact a member of our Family Law Team below.