Pension sharing on divorce: what happens to your pension?
When you're going through a divorce, it's natural to focus on the family home, savings or arrangements for your children. However, one of the most valuable assets in a marriage is often overlooked – pensions.
Many people search online asking questions like "Do I have to share my pension in a divorce?", "Can I claim part of my ex-spouse's pension?" or "How are pensions divided when you divorce?" The answer depends on your individual circumstances, but pensions should almost always be considered as part of any financial settlement.
At Preston Redman, we help clients understand how pensions are dealt with on divorce, explaining the process in plain English and helping them reach fair, practical outcomes that support their future financial security.
Are pensions included in a divorce settlement?
Yes. In England and Wales, pensions can form part of the financial settlement when a marriage ends.
For many couples, a pension is one of their largest financial assets, sometimes even more valuable than the family home. This is particularly true where one person has been paying into a workplace or private pension for many years.
However, a pension is sometimes inappropriately treated as capital available now in the same way as a house or bank account. That may not be correct where a person would use their pension as an income source some years in the future.
The court can take pensions into account when deciding what is a fair financial settlement. At Preston Redman, we encourage clients to look at the whole financial picture, rather than focusing only on assets they can see today.
What is a pension sharing order?
One of the most common ways pensions are divided is through something called a Pension Sharing Order.
Although the name sounds technical, the idea is straightforward. A Pension Sharing Order is a court order that transfers a percentage of one person's pension into the other person's own pension. This allows each person to have their own separate pension for the future.
Once the transfer has taken place, each person's pension becomes independent. This means they can make their own decisions about retirement without relying on their former spouse.
Preston Redman can explain whether pension sharing is appropriate in your circumstances and guide you through the legal process.
Is a pension always split 50/50?
No. There is no automatic rule that pensions are divided equally.
The court's aim is to achieve a fair outcome, taking into account all of the couple's finances rather than looking at the pension in isolation.
Factors that may be considered include:
- The length of the marriage.
- The age of each person.
- The value of all pensions and other assets.
- Each person's income and future earning potential.
- Whether there are children to provide for.
- The financial needs of both people in the years ahead.
- Whether pensions will be used as a capital or income resource.
- The type of pension schemes involved.
In some cases, an equal pension share may be appropriate. In others, a different division may be fairer. Every family is different, which is why tailored legal advice is so important.
Can I keep my pension after divorce?
Possibly. Whether you keep all of your pension depends on the overall circumstances of the case.
Sometimes one person keeps their pension while the other receives a larger share of another asset, such as the family home or savings. This is sometimes referred to as offsetting, meaning one asset is balanced against another instead of dividing both.
While this approach can work well in some situations, it is important to understand the true value of both the pension and the other assets before reaching an agreement. At Preston Redman, we help clients understand the long-term impact of different options before any decisions are made.
How is the value of a pension calculated?
Most pension providers can provide a document showing the pension's Cash Equivalent Value (CEV). This is an estimate of what the pension is worth for the purposes of a financial settlement.
However, the CEV does not always reflect the true value of the pension, particularly where there are public sector pensions, final salary schemes or complex retirement benefits.
In some cases, independent financial experts may be asked to provide specialist advice to ensure the pension is valued fairly.
Preston Redman works closely with trusted experts where appropriate to help clients make informed decisions.
Can we agree what happens to our pensions ourselves?
Yes. Many couples are able to reach an agreement through negotiation or mediation without asking a court to decide.
However, even where you both agree, it is important for that agreement to be approved by the court as part of your financial settlement. This makes the agreement legally binding and provides certainty for the future.
Without a court-approved financial order, financial claims may remain open, even after your divorce has been finalised.
Should I get legal advice about pensions?
Pensions can be one of the most complicated aspects of divorce, and mistakes can have long-term consequences.
Many people understandably focus on immediate concerns such as the family home, but retirement may last for many years. An agreement that seems fair today may not provide financial security later in life.
At Preston Redman, we explain your options clearly, without unnecessary legal jargon. We take the time to understand your circumstances and help you make informed decisions that protect your financial future.
Whether your finances are straightforward or involve substantial pension assets, our experienced family law team will guide you through every stage of the process with practical advice and sensitive support.
Speak to Preston Redman About Pension Sharing on Divorce
Understanding what should happen to pensions during divorce can feel overwhelming, but you do not have to make these decisions alone. Getting the right advice early can make a significant difference to your long-term financial security.
Call our helpful team at Preston Redman today so we can help you with pension sharing on divorce. We will explain your options in clear, straightforward language and work with you to achieve a fair financial settlement that supports your future.
Please note that all content on our website is subject to the terms of our disclaimer.
