We are operating as normal > Read our COVID-19 guidance.

How To Protect Your Pension In Divorce

Despite pensions often being one of the most substantial assets of marriage, contributing more to the overall pot of matrimonial property than anything apart from the family home, they do not always take the prominence they deserve when it comes to negotiating a financial settlement.

What are my legal rights to my ex spouse’s pension in divorce?

It is still often the case that a husband’s pension provision is much greater than that of his wife, especially if she has stayed at home to bring up children. If they had planned to share this pension upon retirement, then the prospect of losing out on this future security can be very daunting.

Fortunately, family courts will take into account pensions when it comes to dividing matrimonial assets upon divorce. Unless one spouse had already built up a large pension pot before a marriage and the marriage was short, then this can just be added to the overall matrimonial pot.

Most divorce settlements will take into account any private pensions. The New State Pension cannot be shared after divorce and neither can the Basic State Pension – but the Additional State Pension can potentially be shared.

What are the ways of dealing with a pension in divorce? 

There are essentially five options for divorcing couples when deciding how to split their pension pots upon separation:

  1. Pension Sharing – this is where one party is given a percentage share of their former partner’s pension pot. A Pension Sharing Order needs to be obtained from the court which states the details of the pension share. The pension share is called a pension credit – and this can be transferred into an existing or new pension scheme. The advantage of pension sharing is that it provides a clean break between divorcing parties.
  2. Pension Offsetting – this is where one party keeps their pension in its entirety, in exchange for matrimonial assets of the same value. For example,if the husband’s pension is worth £100,000, he could give his wife £100,000 in cash and keep his pension. This option can also result in a clean break.
  3. Pension Attachment (called earmarking in Scotland) – this essentially sets aside a portion of the pension pot for the other party. A Pension Attachment Order must be obtained from the court. When the pension starts being paid out, the relevant percentage will be paid out from the member’s pension to their former spouse. The disadvantage of this is that it does not provide a clean break, and if the pension holder dies before retirement their ex-spouse may receive nothing.
  4. Deferred Pension Sharing – this is a form of delayed pension sharing, where the ex partner does not receive a portion of the pension payment until a later date. Normally this applies to divorcing couples with an age gap eg. where one party is already receiving their pension but their former spouse will not be entitled to draw a pension until a later date. 
  5. Deferred Lump Sum – this is an agreement which requires the pension holder to pay a lump cash sum to their former spouse upon retirement. 

Either the couple separating will decide on one of these options through negotiation and mediation, or else a court may need to impose a decision.

NB: Deferred Pension Sharing and Deferred Lump Sum options are not available in Scotland.

How can I protect my pension in divorce?

Pension pots of both spouses generally form part of the overall matrimonial pot. As such, it’s not normally possible to ringfence pensions and exclude them from being factored into a financial settlement; courts will take them into account.

However, Pension Offsetting, described above, is often used as a way of protecting the pension of either spouse during divorce negotiations. If they can agree to use other matrimonial assets to offset against a pension, the member can retain their pension in its entirety.

Which Financial Order Do I Need Tool

Restart
0%

Answer a few quick questions to find the most suitable financial order for you.

It takes less than 3 minutes to be matched with your ideal service.

Get Started
Have you reached an agreement with your spouse on your financial split?
Yes
No
Would you like our solicitors to review your financial agreement and provide you with a written report and a 30-minute legal advice phone call?
Yes
No

Legal Advice Consultation - £99 Service

Speak to our family law solicitors to receive professional legal advice to understand your legal position and where you stand in relation to a financial split.

  • Legal advice is given on your legal position
  • 1-hour telephone call with your solicitor
  • Instantly schedule a call in with your solicitor
  • One low-cost fixed-fee payment of £99
Complete Our Secure Checkout To Get Started - £99

Financial Agreement Consultation Service - £199

Having a qualified family law solicitor review your financial agreement and provide a full consultation on it will ensure that you are receiving a fair settlement.

  • Legal advice is given on your legal position
  • Free 30-minute telephone call with your solicitor
  • Tailored, detailed written report based on your agreement
View Service Information - £199
Which assets do you need to split as part of your financial agreement? Select options below.
Division/sale of a property
Division/sale of 2 or more properties
Division/split of pensions
Child maintenance agreement
Spousal maintenance
Division of joint debt(s)
Division of savings
Division of investments
Division/sale of a business
Other
Next

Detailed Consent Order - £399

This service is ideal for couples that want to put their financial split into a legally binding financial order, to ensure no claims by either party can be made in the future.

This service can include any/all of the following;

  • Division of pensions
  • Property portfolios
  • Divison of business assets
  • Sale or transfer of property
  • Personal belongings
  • Lump sum payments
  • Child/spousal maintenance

Why you should choose this service...

  • You'll save over £1,000 compared to hiring high-street solicitors.

  • Everything is completed online, no time off work or court appearance necessary.

  • Drafted by qualified family law solicitors.

  • We handle everything for you, from start-to-finish including dealing with the courts.
Complete Our Secure Online Checkout To Get Started - £399

Read more information on this service.

Managed Consent Order Service - £299

This service is ideal for couples that want to put their financial split into a legally binding financial order, to ensure no claims by either party can be made in the future.

This service can include any/all of the following;

  • The sale or transfer of a property
  • Personal belongings
  • Child/spousal maintenance
  • Lump sum payments
  • Debt provision

Why you should choose this service...

  • You'll save over £1,000 compared to hiring high-street solicitors to carry out the same service.

  • Everything is completed online, no time off work or court appearance necessary.

  • Drafted by qualified family law solicitors.

  • We handle everything for you, from start-to-finish including dealing with the courts.
Complete Our Secure Online Checkout To Get Started - £299

Read more information on this service.

Solicitor Drafted Consent Order Service 

Save time and money with the right advice, first time

No need to take time off work

No need to attend court or our offices

Everything is completed online

Includes The division of pensions (pensions sharing order)

Callback Request Form

Request a free callback


Click here to chat with us!