Pensions and divorce
Learn about what happens with your pensions during a divorce or separation

Table of Contents
- Pensions and divorce: what you need to know
- Dividing pensions: what are the options?
- Important considerations when dividing pensions
- What factors can affect my share of the pension benefits?
- What are the risks of dividing a pension in a divorce?
- How long after a divorce can I claim my spouse’s pension?
- Separating finances
- Getting financial advice
- FAQs
Pensions and divorce: what you need to know
Pensions are often an overlooked part of the settlement process during a divorce. Yet it is something that you and your partner should be actively discussing in order to ensure that both parties are fairly compensated, particularly in the case of long-term marital relationships.
Dividing pensions: what are the options?
Dividing assets during a divorce can be a complex and emotional process. This includes making decisions about pensions, which are often overlooked. But it’s important to have a plan in place to ensure that both parties are fairly compensated, especially in the case of long-term marriages.
In this section, we will explore several options available for dividing pensions during a divorce or the dissolution of a civil partnership, such as pension sharing, offsetting, and earmarking. We’ll also discuss important considerations and rights to remember during the process.
Pension sharing
One option available for dividing assets during a divorce or the dissolution of a civil partnership is pension sharing. This option provides a clean break between parties since pension assets are split immediately, allowing each party to decide what to do with their share independently.
It’s important to have a plan in place to ensure that both parties are fairly compensated, especially in the case of long-term marriages. Remember to discuss this with your partner to ensure that you both feel satisfied with the outcome.
Offsetting
Pension offsetting is another option available for divorcing or dissolving a civil partnership. The value of each pension is offset against other assets of the same or similar value, providing a clean break between all parties. With this option, each party gets to keep their pension assets, which are then offset against other assets.
For instance, if one person has a large pension pot, the other might get the house, assuming it has a similar value. This can be a useful option, as it provides flexibility and allows both parties to keep their pension assets.
Pension attachment or earmarking
When you get divorced or dissolve a civil partnership, all of your and your ex-partner’s assets are taken into account. In England, Wales, and Northern Ireland, this is known as pension attachment; in Scotland, it is called earmarking.
A pension attachment or earmarking order redirects part or all of the consumer’s pension benefits to their ex-spouse or civil partner. While this may not provide a clean break, as an ongoing link with your ex-spouse or civil partner will remain, it ensures fair compensation for both parties.
Remember that the pension still belongs to the scheme member, but the scheme must pay the ex-partner when the member’s benefits become payable.
The court can order that the ex-partner receives one, or a combination, of the following benefits:
- all or part of the member’s pension income (this doesn’t apply in Scotland)
- all or part of the member’s tax-free cash sum
- all or part of any lump sum paid in when the member dies.
When a pension is divided during a divorce, the taxable income payable to the ex-partner still belongs to the member, so it will be taxed as if it’s being paid to the member.
The good news is that payments won’t count as taxable income for the ex-partner and don’t need to be declared as income for tax purposes to HMRC.
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Important considerations when dividing pensions
A pension sharing or offsetting order
The Court will issue a pension sharing order (PSO) that determines how much of the pension the ex-spouse or ex-partner is entitled to receive. This is expressed as a percentage of the transfer value(s) of the pension(s) that are to be split.
For example, if the value of the pension was ÂŁ300,000, a 50% share would give each person ÂŁ150,000. Our team can recommend suitable destinations for a pension-sharing order and provide further advice regarding your other options.
Getting an accurate valuation of the pension
Many people aren’t aware of what’s in their workplace pensions.
Annual statements from pension providers only show retirement income, not the pension’s current value (in the case of defined benefit schemes). Calculating how much to add to the matrimonial pot can be challenging.
Contact your pension provider to help you accurately value your pension. It’s important to ensure both parties are fairly compensated during the divorce settlement.
Cash Equivalent Transfer Value – CETV
Calculating the value of a pension for divorce settlement purposes requires a ‘cash equivalent transfer value’ (CETV). This value represents the amount an existing pension provider would need to transfer to another pension provider if a transfer was requested as part of a pension-sharing order.
If your annual statement doesn’t contain a CETV or requires a more current figure, you can generally request it from your pension provider. However, in the case of final salary or other salary-related pension schemes, the CETV may not provide an accurate valuation. In such cases, it may be worth seeking advice from a financial adviser.
You can find your pension’s worth and transfer value on your annual statement if you have a personal pension. It’s important to note that the majority of schemes will charge a fee to provide these values, and some fees can be high.
Note that in Scotland, the pension value is calculated based on the date of separation, and only the value accumulated during the marriage is considered.
How much of my pension is my spouse entitled to?
When a couple gets divorced, the value of their private pensions, including both occupational and personal ones, are usually added to the overall pot of financial assets.
The pensions will then be divided as part of the settlement, starting with a 50:50 split. However, there are exceptions to this rule.
For example, if one party had already built up a significant pension before the marriage, or if the marriage was short, the split may not be equal.
Please note that the New State Pension and Basic State Pension cannot be shared after divorce. However, it is possible to share the Additional State Pension.
What factors can affect my share of the pension benefits?
The court will consider several factors when determining how financial assets, including pensions, are shared out. These include:
- Children: Do you have dependent children? Which spouse will they live with?
- Other assets and sources of income: Is it enough to maintain an acceptable standard of living? Will you have any caregiving responsibilities?
- Health and age: Being younger and healthier theoretically makes it easier to improve your financial position, and being older or in poor health may entitle you to a greater share. A big age gap between spouses may result in less being awarded to the younger spouse.
- Length of the marriage: If the marriage has lasted a short time (e.g. under 12 years), some of the pension assets built up before the marriage may be excluded from the financial settlement.
- Contributions to the marriage: The court considers being the breadwinner and raising the family as equal contributions, so the main earner does not automatically have any more right to the marriage’s assets.
What are the risks of dividing a pension in a divorce?
Dividing a pension in a divorce can come with its risks:
- Financial loss: if the value of the pension is split, this can result in you receiving a reduced amount of the overall assets depending on certain factors.
- Valuation challenges: inflation, growth, and retirement age will affect the value of your pension. This could potentially make it difficult to assess the present value at the time of the division, meaning you could receive less than your pension is actually worth.
- Timing: you may need to wait until retirement age to receive your share of the pension.
- Inequality of future income: pension division can potentially lead to a difference in income between the parties. One spouse may receive a larger share of the pension, giving them a more secure retirement income.
How long after a divorce can I claim my spouse’s pension?
A divorce does not automatically settle your financial affairs. Unless a legally-binding financial settlement has been achieved, there is no time limit for making a claim on your ex-spouse’s finances.
To avoid potential issues in the future, it’s highly advisable to seek a formal financial agreement, even if your divorce is agreeable. This will provide a legally binding divorce financial order that separates your finances from your ex-spouse for good, enabling you to move on with your independent lives.
Separating finances
There are different rules around divorce or dissolving a civil partnership when separating finances. Here’s what you need to know:
- If you’re divorced or have dissolved a civil partnership, you might be entitled to some or all of your partner’s pension, depending on what’s agreed and/or ordered by the court.
- If you separate without legally divorcing or dissolving your civil partnership, you won’t be able to formally share your partner’s pension. However, you might still be entitled to a spouse’s pension or lump sum when they die.
- If you’re unmarried or in a civil partnership that’s separate, neither party is automatically entitled to a share of the other’s pension. Couples who have lived together might be referred to as being in a ‘common law marriage’ or ‘cohabiting’. While this is different for most of the UK, there can be some circumstances in Scotland where they can have the same legal protection.
Remember that pensions are often an overlooked part of the settlement process during a divorce. It’s important to have a plan in place to ensure that both parties are fairly compensated, particularly in the case of long-term marital relationships.
Getting financial advice
If you’re going through a divorce or dissolving a partnership and need help dividing pensions, seeking professional financial advice is important. Don’t hesitate to reach out to a financial advisor or planner who can help you navigate this process. Your financial future is important and the right guidance can make all the difference.
When you are looking for a financial adviser, you should always ensure they have the relevant credentials and qualifications to give you professional advice. You must make sure they are approved by and registered with the Financial Conduct Authority (FCA), which works to protect individuals from illegitimate conduct within the financial industry.
Our financial advisers are qualified to provide you with professional advice and recommendations. They have years of expertise and knowledge in a range of different areas, one of them being the division of pensions during a divorce.
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FAQs
Can my ex-wife claim my State Pension years after divorce?
Whether or not your ex-wife can claim your State Pension years after divorce will depend on a number of factors, however, the length of time that has passed since the divorce will not matter. If you reach State Pension age after 6th April 2016 then this is considered the ‘new’ State Pension which means that it cannot be shared if your marriage or civil partnership ends, however, a court could order any ‘protected payments’ to be shared. If you reached State Pension age before that date, your ex-wife won’t be entitled to your basic State Pension but a court may order the sharing of your additional State Pension if you have this (this is extra money you could be entitled to if you’re a man born before 6th April 1951 or a woman born before 6th April 1953.)
Can a final salary pension be split on divorce?
A final salary pension can be split on divorce but it will be more complex due to the nature of the pension. After obtaining an up to date CETV from the pension provider, an agreement will either be reached by both parties or the court will intervene to allocate the pension how they see fit.
Do I lose my ex-spouse’s private pension if I remarry?
If you remarry, whether or not you lose your ex-spouse’s private pension will depend on what was arranged initially. If you were issued an earmarking/pension attachment order, this will generally stop if you remarry. If you were issued a pension sharing order or chose the pension offsetting option, then this will not be affected by you remarrying.

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