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When a couple decides to divorce and go their separate ways, finances are often concerned.

Whether you have children or not, it’s recommended that you and your ex-spouse sit down and come up with financial settlement you’re both happy with.

This is particularly important for large assets, including your or your ex-spouse’s pension.

Your pension should always be included in any divorce settlement, whether you’re divorcing or dissolving a civil partnership.

This is because, in England and Wales, just getting a divorce doesn’t cut the financial ties between the ex-spouses, making it possible for one party to claim the other party’s pension years down the line.

When seeking to legally separate a pension or a set of pensions, the mechanism by which you do this is called a pension sharing order.

What happens to my pension on divorce?

Pensions count as a joint marital asset and will therefore be included in the ‘matrimonial pot’, which is essentially an overview of everything you own together within your marriage.

They can be split in numerous ways, but the most common ways are;

  1. Pensions Sharing – A spouse receives a sum of money from the other parties pension as part of the financial settlement.
  2. Pension Offsetting – The pension value will be offset against other assets such as the family home or savings.

The starting point for splitting pensions should always be 50/50.

Due to the way pensions are regarded in financial proceedings, you may not directly receive any of your ex-partner’s pension; this will be decided when you agree on how other money and assets are to be divided.

For example, you may agree to stay in the family home and your ex-spouse provides maintenance for you and any children for a period of time, whilst he/she maintains their pension pot.

Can my ex-husband or wife claim my pension after divorce?

In short, yes, unless you have agreed and signed a financial consent order following the divorce.

Your ex-spouse can absolutely claim your pension after your divorce if there is no legally binding financial agreement in place.

Pensions are amongst the largest assets of the marriage and many ex-spouses will seek to make claims against their previous partners; even for years or decades after the divorce has been finalised.

Over recent years, there have been many high-profile cases in the press whereby an ex-wife of 10+ years has successfully claimed more money and assets, such as pension contributions.

This is why it’s imperative that you deal with your pensions at the same time as your divorce proceedings. For more information on how to split pensions, please see below.

What are a spouse’s rights to pensions?

Often, pensions are neglected during the financial settlement proceedings. Even if you have agreed on a settlement, you need to confirm it through a court order to make it legally binding.

Keep in mind you can only share your pension with your ex-spouse if you have been married or in a civil partnership.

The spouse’s right to your pension will depend on a number of factors, including but not limited to:

  • The length of the marriage
  • Time since the separation
  • Age of any children or dependants
  • The financial situation and needs of both parties
  • How you and your ex-spouse behaved throughout the proceedings

How the courts deal with splitting pensions in divorce

Normally, when a marriage ends in England or Wales, the court will deal with the pension arrangement in three ways.

You can either receive a percentage share of your ex-spouse’s pension pot: known as pension sharing. This money will be legally treated as yours.

Alternatively, you can offset the value of the pension against any other assets: for instance, you can keep your pension but your former spouse will keep the family home.

Lastly, it’s possible that some of your pension will be paid to your former partner or vice versa.

This is known as pension attachment and resembles a maintenance payment that’s made directly from one party’s pension to their former partner.

It’s recommended that you have a talk with your ex-spouse and agree on how the pension and any other large assets will be split.

Once you have reached a divorce settlement, instruct your solicitor to draw up a ‘consent’ or court order to legalise your financial settlement.

Once it has been approved by the court and the divorce and financial settlement are finalised, neither party can make any further claims for money in the future.

What if I have contributed to the pension after my divorce?

A common issue many divorcees face is whether their ex-spouse may claim their post-divorce pension contributions.

The common argument is that your ex’s claim should only include contributions made while the two of you were together.

However, in some cases, the Courts can be persuaded that any post-separation contributions should be shared.

This is particularly true if you haven’t severed your financial ties with your ex via a Financial Consent order: this would mean your ex can claim your pension for decades after the two of you have gone your separate ways.

What about pension claims and remarriage?

Remarriage poses an interesting legal conundrum. If you and your spouse divorced without a Financial Order in place, your finances are generally left wide open.

If one of you remarriages, however, they are barred from making certain financial claims against the ex-spouse.

This is known as the ‘remarriage trap’ and does have its limitations: it can bar the remarried party from claiming property, income or savings but doesn’t extend to pensions.

How can I prevent a future pension claim?

If you would like to ensure your ex-spouse doesn’t have any claims on your pension following a divorce, don’t make the mistake of thinking a divorce also severs your financial ties with each other.

In case neither you, nor your ex-spouse wants to make any claims against each other, the consent order will also guarantee a clean break between parties, making the divorce proceedings much smoother.

We have a low-cost professional service that can help you separate your pension funds without spending thousands going to court.

This post was written by Mark Keenan. Editor of the Divorce Online Blog and Managing Director of Online Legal Service Ltd. Mark has been writing about divorce and related subjects for over 20+ years and is an expert in legal marketing.

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