Dividing finances is one of the most complex and emotionally charged aspects of divorce, and pensions often represent a significant part of that process. A pension may be one of the most valuable assets a couple owns.
When a marriage or civil partnership ends, pensions can be divided in several ways: through a pension sharing order, pension offsetting, or a pension attachment order. (also known as earmarking).
The court’s starting point is often a 50/50 split of all marital assets, including pensions, but this is not a hard rule. The final decision depends on what’s fair and reasonable based on each person’s circumstances, particularly the financial needs of any children and each spouse’s ability to meet them.
In this blog, we will cover how pensions are treated in divorce settlements, your legal rights, and how professional legal advice can help you secure a fair and lasting outcome.
Why pensions matter in divorce settlements
Pensions are designed to provide long-term financial security after retirement. After a divorce, pensions become an overall part of the financial picture. Whether you have a workplace pension, a private pension, or several plans, they are usually considered marital assets if built up during the marriage.
For many people, the pension represents years of contributions and can hold significant value. Ensuring it’s divided fairly is crucial to achieving financial stability for both partners in the future.
Common misconceptions about pension divorce rights
A common myth is that each person simply keeps their own pension, or that smaller pensions aren’t worth splitting. In reality, every pension has to be valued and disclosed, regardless of size.
Another misconception is that state pensions cannot be divided. Whilst you cannot transfer part of your state pension, elements such as additional state pension or state pension credits can be considered as part of a wider financial settlement.
Understanding your rights and obligations early in the process helps prevent costly mistakes and ensures both parties can plan for a secure future.
Divorce and pensions: what are your rights?
In England and Wales, pensions are treated as part of the marital pot when calculating a financial settlement. This means both parties are entitled to a fair share, regardless of whose name the pension is in. The court will consider factors such as:
- The length of the marriage or civil partnership
- The ages and earning capacity of each person
- Contributions made by each spouse (financial and non-financial)
- Ongoing needs, particularly housing and childcare
In most cases, you’ll need a court order to formalise how the pension will be divided. This ensures that the settlement is legally binding and enforceable.
How pensions are valued during divorce proceedings
Before pensions can be divided, they must be accurately valued. This is typically done using a Cash Equivalent Transfer Value (CETV), which is an estimate provided by the pension provider that shows what the scheme is worth if transferred.
However, CETVs can sometimes understate or overstate the true value, especially for defined benefit (final salary) schemes. A pension expert or actuary may be required to give an independent assessment, ensuring both parties have a clear and fair understanding before any agreement is reached.
Ways pensions can be split in a divorce
Pension sharing orders
A pension sharing order is the most direct and common method. It divides the pension at the time of divorce, allowing each person to take their share and either keep it in the same scheme or transfer it to a new one. The split is usually expressed as a percentage of the pension’s value, and once the order is implemented, both parties have independent pension rights going forward.
Pension offsetting
With pension offsetting, one party keeps their pension, while the other receives a greater share of other assets, for example, more equity from the family home. This option can be simpler, but requires careful valuation to ensure fairness, as pensions and property assets behave very differently over time.
Pension attachment orders (earmarking)
A pension attachment order (sometimes called an earmarking order) allows one person to receive part of their ex-partner’s pension benefits when they are paid, rather than splitting the pension upfront. This would include a portion of the pension income, lump sum, or death benefits. While it can suit some cases, it offers less certainty and independence than pension sharing, as the recipient only receives benefits when the pension-holder retires.
Divorce and pension plans – what options do you have?
Workplace pensions and divorce
Workplace pension, whether defined benefit or defined contribution schemes, can usually be divided using any of the above methods. Employers or pension scheme administration will need to provide the CETV and confirm how a pension sharing order would be implemented.
Private pension plans and divorce settlements
Private pensions, such as personal and self-invested pensions (SIPPs), are also included in financial settlements. They can be split, offset, or attached in the same way as workplace pensions, depending on the court’s decision and what’s deemed fair.
State pension considerations
The basic State Pension cannot be shared or transferred, but the Additional State Pension (from older schemes such as SERPS or State Second Pension) may be taken into account. You can also check your National Insurance record and forecast your state pension entitlement online, which can help inform negotiations.
Pension divorce advice – getting professional support
Pensions are complex and often misunderstood; it’s vital to get specialist legal and financial advice before agreeing to any settlement. Without proper guidance, you risk accepting less than you’re entitled to, or inadvertently giving away more than you should.
An experienced family law solicitor can help you:
- Identify all pension assets that should be included
- Ensure accurate valuations
- Negotiate or apply for the appropriate court order
- Protect your long-term financial security
How Eric Robinson can help
At Eric Robinson Solicitors, we understand the sensitivities and practicalities of divorce and financial settlements. Our family law solicitors help clients make informed decisions about pensions during the divorce process.
We explain your rights in plain English, guide you through your options, and ensure your settlement reflects both your immediate needs and your future security.
To discuss your circumstances in confidence, contact your closest Eric Robinson Solicitors office today:
FAQ’s
Are all assets split 50/50 in a divorce?
Not necessarily. While English and Welsh courts often begin with the idea of an equal 50/50 division of marital assets, this is only a starting point, but not an automatic outcome. The court’s main goal is fairness, based on the unique circumstances of each couple.
When determining what’s fair, the court will consider several factors under Section 25 of the Matrimonial Causes Act 1973, including: each party’s income and earning capacity, financial needs, standard of living during marriage, age, health and the needs of any children.
If one spouse has a significantly lower income or is the primary caregiver, they may receive a larger share of assets to ensure stability for the family. Pensions, property, savings and other assets all fall within this calculation.
In short, while a 50/50 split is a common benchmark, the court’s priority is achieving financial fairness, not rigid equality. Obtaining professional advice from a family law solicitor ensures your individual circumstances and long-term needs are properly represented and protected during negotiations.
What assets cannot be split in a divorce in the UK?
Not every asset is automatically shared in a divorce. Assets are generally divided into matrimonial and non-matrimonial property. Matrimonial assets include those acquired during the marriage, such as the family home, savings, pensions, and jointly owned investments. These are usually considered part of the financial settlement.
Non-matrimonial assets, on the other hand, are those obtained before the marriage or after the separation. These can include inheritance, gifts, or personal injury settlements. These are usually excluded unless they’ve been mixed into marital finances or are needed for another party’s reasonable financial needs, particularly housing or child support.
Pensions built up before marriage can sometimes be partly protected, depending on how much was accrued during the relationship. The court has discretion to include or exclude certain assets if fairness requires it.
Asset classification can be complex; it’s crucial to seek professional legal advice before reaching a settlement. At Eric Robinson Solicitors, our family law specialists can assess your circumstances and help ensure all assets are properly valued and treated fairly in line with UK law.
How do I protect my pension in a divorce?
Protecting your pension in divorce starts with transparency and seeking professional advice. Both parties are required to disclose the full value of their pensions, but how you approach the settlement can make a significant difference to your long-term financial position.
First, obtain accurate Cash Equivalent Transfer Values (CETVs) from each pension provider. This gives you a reliable picture of what your pension is worth. Next, speak to a family law solicitor who can help you understand whether pension sharing, offsetting, or attachment is the most suitable approach.
You can also consider offsetting arrangements, allowing you to retain your pension in exchange for giving your ex-spouse a larger share of another asset, such as a property.
Your pension is often your most valuable long-term asset, so it’s essential not to agree to any division without expert guidance. Eric Robinson Solicitors can help you assess your pension’s value, explore your options, and negotiate a fair and legally binding arrangement that safeguards your financial future.
Can an ex-wife get her ex-husband’s pension?
Yes, an ex-wife can receive part of her ex-husband’s pension, and vice versa. The law focuses on fairness and individual need, not gender. When a couple divorces, pensions are treated as part of the overall financial settlement. The court will consider their value alongside other assets, such as property and savings. Before deciding how they should be divided.
The most common method is through a pension sharing order, which divides the pension at the time of divorce and allows the receiving party to transfer their share into their own pension pot. This gives both parties independent control over their retirement funds.
Alternatively, the court may order pension offsetting, where one spouse keeps the pension and the other receives a larger share of another asset, or pension attachment, where a portion of pension payments is made to the ex-spouse when the pension is drawn.
Each method has different tax and financial implications. At Eric Robinson Solicitors, our family law specialists can explain your rights clearly, ensure pensions are valued properly, and help you achieve a fair and sustainable financial outcome.
How does pension sharing work?
A pension sharing order is the most common and straightforward way to divide pensions in a divorce. It creates a clean break by transferring a percentage of one person’s pension to their former spouse or civil partner. Once implemented, both individuals have separate pension rights and complete financial independence.
The process starts by obtaining a Cash Equivalent Transfer Value (CETV) for each pension scheme. The court then decides what proportion of the pension should be shared, for example 40% to one spouse and 60% to the other. This percentage is set out in a pension sharing order, which becomes legally binding once the divorce is finalised.
The receiving party can usually choose to transfer their share to an existing pension plan or open a new one. This approach is often preferred because it provides long-term security and flexibility, allowing each person to manage their retirement savings independently.
Given the financial complexity, it’s vital to seek specialist legal advice. Eric Robinson Solicitors can guide you through each stage, ensuring your pension share is implemented correctly and in your best interests.
How to offset your pension?
Pension offsetting is an alternative to dividing a pension directly. Instead of splitting the pension itself, one spouse keeps their pension intact while the other receives a larger share of another asset, such as the family home, savings, or investments.
This method can work well when one party wants to retain their retirement fund while ensuring the other has immediate financial security. However, it requires careful calculation. Pensions are long-term assets, while property or cash provides immediate value, so offsetting must be based on accurate and realistic valuations.
Courts and solicitors typically use Cash Equivalent Transfer Values (CETVs) as a starting point, but may also seek independent financial advice to ensure the comparison is fair.
The advantage of offsetting is that it avoids ongoing ties between ex-spouses and offers flexibility. The risk is that the asset values may not grow at the same rate over time.
Our family law solicitors can help you explore whether offsetting is appropriate in your situation and ensure the outcome is both fair and financially sound for the future.
What is a pension attachment order?
A pension attachment order, sometimes called an earmarking order, allows one spouse to receive a portion of the other’s pension benefits when they become payable, rather than splitting the pension at the time of divorce.
Under this arrangement, part of the pension income, lump sum, or death benefits is directed to the ex-spouse once the pension holder retires. However, the pension remains in the original holder’s name, meaning the recipient has no control over when or how it’s taken.
While this method can provide ongoing financial support, it has several drawbacks. Payments stop if the pension holder dies or if the recipient remarries, and the receiving spouse cannot access funds independently. For this reason, pension sharing is usually preferred, as it provides a clean break and more financial certainty.
A pension attachment order may still be appropriate in specific cases, particularly where future income security is a key consideration. Eric Robinson Solicitors can advise you on whether this option is right for you and guide you through the process with clarity and care.
