10 Common Pension Beliefs In Divorce – True or False?

1. My pension will be automatically divided when I divorce.

False

Nothing happens to your pension automatically when you divorce. It must be specifically dealt with in your financial settlement, either through a Pension Sharing Order, Pension Offsetting, or, less commonly, Earmarking.

Until one of these options is agreed and approved by the court through a Financial Order, each person keeps their own pension in full.

To protect your entitlement, ensure every pension is disclosed, accurately valued, and included in the overall settlement before your divorce is finalised.

2. Only my defined benefit (final salary) pension matters in a divorce

False

Both types of pension are treated as valuable marital assets. Defined benefit schemes provide guaranteed income for life, while defined contribution pensions hold real capital value that can often be substantial.

The court considers all pensions accumulated during the marriage, regardless of type. A fair outcome relies on properly valuing every pension before deciding how to share or offset them.

3. If my ex-spouse has a large pension, that means I receive half of it.

False

There’s no automatic entitlement to half of your spouse’s pension. The division of pensions depends on what’s fair overall, considering income, needs, age, the length of the marriage and any career breaks.

You may receive a portion of their pension under a Pension Sharing Order, or a greater share of another asset, such as the family home, through pension offsetting.

The court aims for fairness in outcome, not an exact 50/50 split of assets.

4. A pension sharing order gives me a clean break from my ex-spouse’s pension.

True

A Pension Sharing Order divides one person’s pension by transferring an agreed percentage into the other’s name, creating full financial independence.

Once a pension sharing order is finalised, both parties control their own pension benefits and make their own retirement choices.

It’s the only method that achieves a permanent clean break, unlike Earmarking, where payments remain linked to your ex’s pension, or Offsetting, which simply trades one asset for another.

5. Offsetting pensions is always simpler and better.

False

Offsetting your pension can seem straightforward, but it often leads to unfair results if pension values are underestimated. A property meets immediate housing needs, but a pension provides long-term income.

Independent valuations are essential, especially for final salary schemes where the lifetime value can be far higher than expected.

Pension offsetting can work well, but only when figures are accurate and future needs are properly assessed.

6. Valuing a defined contribution pension is easy

Partly true

The balance shown on your statement is a starting point, but it doesn’t reflect future growth, charges, or the timing of retirement.

For fairness, all pensions (both defined benefit and defined contribution) should be valued at the same point in time, ideally with advice from a pension expert.

Only then can you decide whether to share, offset, or leave the pension untouched as part of an agreed financial settlement.

7. As a homemaker who took career breaks to raise children, I’m not entitled to a share of my spouse’s pension.

False

Career sacrifices made for the family are fully recognised in divorce settlements.

If you took breaks or reduced working hours to care for children while your spouse built their pension, the court considers this contribution equally valuable.

Your homemaking role enabled your spouse’s career progression.

Courts aim for fairness, often awarding a significant pension share to compensate for lost earning years and ensure you have adequate retirement income despite career interruptions.

8. I should prioritise keeping the family home over claiming my share of the pension.

Partly true

While immediate housing needs are important, sacrificing your pension share entirely can leave you vulnerable in retirement.

Many people (often women) accept a smaller pension portion to keep the home, but without proper valuation, this trade-off can be severely imbalanced.

A house provides shelter now; a pension provides income for decades. The key is achieving the right balance through expert valuation, considering both your immediate housing needs and long-term financial security in retirement.

9. If I draw from my pension soon after divorce to meet cash-flow needs, it won’t affect my future contribution allowances.

False

Accessing taxable income from a pension triggers the Money Purchase Annual Allowance, cutting your annual contribution limit from £60,000 to £10,000. This applies whether your pension was kept in full or received through a Pension Sharing Order.

Before withdrawing, seek advice — there may be other ways to manage short-term costs without restricting your ability to rebuild your pension in the years ahead.

10. I can rely on a verbal agreement with my ex-partner.

False

Informal agreements carry no legal protection. Only a court-approved Financial Consent Order finalises how pensions and other assets are divided and prevents future claims.

Because pensions can be split, offset or earmarked, each with different long-term effects, advice from a family law solicitor and a financial adviser is vital.

It’s the only way to ensure the financial settlement is fair, enforceable and protects your future income.