Pension vs. The Family Home – Is It Ever a Fair Deal?

4 minutes reading time

When parties go through separation, the number one priority is often housing.

The stress of ensuring immediate housing needs are met can often result in parties overlooking the importance of pension assets.

When considering finances on separation, the overriding objective is fairness. This applies to pensions as well as all other capital assets and income.

Often, pensions are among the most valuable assets.

It is fundamental that both parties disclose the Cash Equivalent Transfer value of their pension assets to determine how they can be shared equally.

Our Family Solicitors assess how pensions are dealt with on divorce.

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Pension vs. The Family Home Is It Ever a Fair Deal

How pensions are dealt with on divorce

On divorce or dissolution of a civil partnership, there are various ways pensions can be dealt with, and the usual options are offsetting and pension sharing. 


Pension offsetting is a process whereby the value of the pension resources is set against the value of other assets held by the parties.

The right to receive a present or future income is traded for capital or money now, and the pension rights remain with the pension member.  

Pension Sharing

With pension sharing, the existing pension arrangement is split and divided between the parties following divorce or dissolution proceedings.

A pension sharing order transfers a part of a pension from one party to the other, giving the recipient a separate pension fund that can be invested in the same scheme (in some circumstances) or in another external scheme. 

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How pensions are dealt with on divorce

Instructing an expert 

After an exchange of financial disclosure, consideration should be given as to whether a pension on divorce expert should be instructed by both parties to consider the values of the pensions and consider the calculations for pension sharing or offsetting.

The report can then form the basis of negotiations.

If you are in court proceedings, you may be ordered by the court to instruct a pension on divorce expert if the court believes that expert evidence is necessary to determine the issues. 

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Instructing an expert

The objective of pension settlements

The aim of any settlement in relation to pensions is to strive for a fair outcome between the parties, which is particularly important for those individuals who have been out of work for a significant period of time, for example, due to childcare responsibilities, meaning they have not had the ability to make the same contributions to their pension provision. They will need to be compensated for this. 

It is important to think about what income you will have when you retire.

Women often prioritise keeping the family home at the expense of giving up a valuable pension later in life.

In a recent article published by Scottish Widows, it was shown that nearly 2 million single mothers face retirement poverty due to the “motherhood penalty”.

Ignoring pensions can leave many people, particularly women, in a worse financial position after divorce.

New calculations have been published from Quilter to suggest for a single person to achieve a “moderate” lifestyle in retirement, they must have a pension pot of at least £459,000. This is why seeking legal advice regarding your pension entitlement is fundamental.

In a nutshell, swapping the equity in the family home is not always fair.

It is necessary to seek early legal advice to ensure your financial settlement meets both your needs both now, and in retirement. 

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The objective of pension settlements

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If you have any queries regarding your pension throughout divorce, please contact Myerson Solicitors' Family Lawyers on: