Pensions & divorce

When considering how to deal with financial matters upon divorce or dissolution of civil partnership, the Court will look at all the available assets.

The most significant asset other than the matrimonial home is often one or both parties’ pension provision.

Dealing with pension assets, however, is often far more difficult than dealing with other assets, particularly when trying to achieve a clean break (that is dividing the assets up in such a way that neither spouse continues to make payments to the other).

For anything further, one of our specialists would be delighted to meet you to talk through your options and answer any questions. Please contact us at any time.

How we can help you

Pensions cannot be treated in the same way as other assets as they are valued differently and can’t easily be divided up on the same basis.

Commonly, there is only one large pension fund to deal with or one spouse’s pension fund is far larger than the other. The Court, when considering how to deal with the division of assets fairly, will also be concerned to ensure that both parties can have a financially secure retirement.

In dealing with the difficulties of pensions, the law has been developed so that there are a number of ways to deal with a pension, the most common being a pension sharing order, so as to provide each party with some sort of financial provision in their retirement.

Valuation of a pension

The Court will only allow pensions to be valued in one way, which is the Cash Equivalent Value of the pension rights. At some stage, a Cash Equivalent Value of the pension rights will need to be obtained.

It is usually advisable, in addition to good legal advice, to obtain an expert opinion as to the true value of a pension, or what it may provide in the future for one or both parties. With expert advice the parties can determine what the best course of action is for them.

Pension Sharing

A pension sharing order means that a pension is divided on a percentage basis. The appropriate percentage of the pension fund is ‘debited’ from the fund and ‘credited’ to the beneficiary of the pension sharing order, either within the same pension scheme or another scheme. Most private schemes insist that there is an external pension transfer, whilst most public sector schemes insist that there is an internal transfer only.

It is worth noting that a pension sharing order is only available by order of the Court, and only upon divorce, dissolution of a civil partnership or nullity.

A fee may be charged by the pension trustees which may vary.

There are other options available when dealing with pensions and if applicable, these can be discussed in more detail.