Pensions and Divorce

How is a pension split in a divorce?

In a divorce settlement, pensions are taken into account together with all other financial assets. Once all assets have been disclosed then one of our divorce experts can advise you on what you are entitled to.

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It is not uncommon for a pension fund to be one of the largest assets in a divorce, and how pensions are treated is important.  The first step is to obtain a pension valuation, before looking at how an equalisation of pension pots can be achieved.

There are a number of factors that can impact what a fair figure is when considering equalisation.  For example, we can advise you if pre-marital contributions will affect this. On some occasions, the age of you and your spouse together with any health conditions may warrant adjustments.

Achieving equalisation may mean that one spouse has to transfer some of their pension fund to the other spouse.  This can be done by way of a pension sharing order or pension attachment order:

  • a pension sharing order will divide a percentage of the pension fund now and transfer it into a separate fund in the other spouse’s name;
  • a pension attachment order earmarks an amount of the pension pot which will then be paid out to the other spouse when the pension comes into payment at retirement.

If a pension sharing order or pension attachment order does not appeal to you, then we can discuss if off-setting would better meet your needs.  This is where each party retains their own pension funds, but the spouse with the lower (or even no) pension receives some additional asset instead.  This is typically a larger share of equity in the family home or a lump sum of money.

Pensions & Divorce FAQs

Are all pensions taken into account in a divorce?

Your former spouse may have an entitlement to your private pension, but they will not have an entitlement to your basic UK state pension but your additional state pension could be shared.

If you or your spouse have a private pension, then it must be disclosed as part of the financial disclosure during the divorce process. All pensions, whether held in the UK or abroad, must be disclosed.

Is my former spouse entitled to a share of my pension?

Whether a pension fund has to be divided will depend on the individual circumstances. Most pension funds will be considered to be a matrimonial asset and therefore will be considered for division. However, there are some circumstances when a court may decide that a pension should not be divided, and these circumstances tend to fall into one of the following categories:

  • the marriage has been a short one and it is not equitable to divide the pension fund;
  • the pension fund is very small and the cost of dividing it would not be worthwhile;
  • the pension fund has been accumulated following separation; or
  • the pension fund was accumulated prior to marriage.

If you have separated from your spouse but have not yet obtained a consent order or order from the court formalising your financial settlement, then your former spouse can still make a claim

over your UK pension.

If your pension fund is held overseas then your spouse will still have an entitlement to a share of it, provided it is considered a matrimonial asset. If you hold an overseas pension, you should contact one of our specialist lawyers as soon as possible as the courts do not hold the same powers, and your options for dividing an overseas pension will differ.

How is an English pension shared after an overseas divorce?

Alternatively, if you were divorced overseas but your spouse has a UK pension here you should contact us for legal advice on how to obtain a share of that pension. Only a court in England and Wales can make a pension sharing order for a pension held here.

How is a pension shared in a divorce?

Once all assets have been disclosed by both spouses then one of our expert lawyers can advise you on your legal entitlements. The starting point, when calculating the financial settlement, is to achieve an equalisation of pension provision for the period of the marriage.

If both spouses have a similar pension fund, then this may mean each spouse just keeps their own pension. However, it is not uncommon that one spouse may have a larger pension, while the other spouse has little or no pension provision. In those circumstances, the spouse with little or no pension provision will need to receive a share of their spouse’s pension. This can be done in one of three ways:

  • Pension sharing – this is when a percentage share of one spouse’s pension fund is divided off into a separate pension fund for the other spouse. The investments may remain in the existing scheme or could be transferred into a new scheme with a different provider. This is the preferable option for many as it provides a clean break for both parties, with no continuing financial ties.
  • Off-setting – this is when, instead of receiving a share of the pension fund, the spouse receives cash or another asset such as property instead.
  • Earmarking or pension attachment – this involves no legal transfer of pension rights but provides for sharing future payments from pension income once income starts to be taken. It is similar to a form of maintenance, and the pension provider pays a percentage of the pension income or lump sum to the receiving spouse. This does not allow for a clean break, and it has the significant disadvantage that if the spouse who holds the fund dies before retirement, then the entitlement to regular monthly payments to the receiving spouse will end.

How do I protect my pension in a divorce?

If your pension was accumulated during the course of your marriage, then you are unlikely to be able to keep it from your spouse. However, there are two main ways to safeguard your pension entitlement.

First, you need to ensure that your pension is accurately valued by an actuary. We have a panel of pension experts and will advise you on the most appropriate expert to use given your own individual circumstances. An expert valuation will enable you to see what your pension is worth today, and what share in its value would be needed to ensure an equal division between you and your spouse. Given different ages and the difference in life expectancy between the sexes, it is unusual that a 50/50 split generates an equal income to each party.

Second, if you wish to retain your pension entirely then it is wise to look at pension offsetting (described above). In order to accurately calculate and negotiate an offset, it is important that you obtain expert advice to understand how the pension value could be translated into an equivalent monetary or property interest.

If you have suffered domestic abuse, you may need to move out to escape. In these circumstances, you should seek urgent legal advice as it may be possible to obtain a court order removing of your spouse from the home instead of you having to leave.

How Osbornes can help?

We have a number of expert London divorce lawyers with experience in representing and advising clients on all aspects of pension division and protection in divorce financial settlements. We deal with both UK and overseas pensions.

If you are overseas or outside London, we have high-speed video conferencing facilities and a full online service to ensure you are kept up to date and fully appraised of your case and legal options.

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    • Andrew secured me the best financial settlement for my claim. He is a credit to Osbornes Solicitors.

      Family Department Client

    • "Lisa Pepper was recommended to me as non-nonsense and able to help me with a difficult and confrontational divorce. She more than lived up to that – she was practical, collected and always available with a clear opinion and suggestions of how to move forwards. She also was open and helpful about costs and how to mitigate them"

      Legal 500 2021

    • "Mark Freedman is a very capable lawyer, renowned for not being a pushover and pushing his clients’ cases as much as he can, but will always talk sensibly about settlement. He is among the best – tenacious, good judgment and tactically aware."

      Legal 500 2021

    • "Mark Freedman is a dynamic and highly experienced family lawyer who fights extremely hard for his clients and is always in their corner, thus ensuring their loyalty and confidence. In a trial you would always want him on your side."

      Legal 500 2021

    • "She has impressed me as someone who fights my corner but also understands the importance of resolving issues without unnecessary escalation. She is calm and reassuring."

    • "Her mediation practice is exceptional; she is also a great solicitor and has a breadth of skill which is really useful."

      Chambers UK 2021

    • "He is really experienced and wise. He has a lovely manner about him and clients feel safe with him."

      Chambers UK

    • "Jo Wescott is top notch and widely recognised as a rising star throughout the profession. She brings a winning combination of great judgement, an immense work ethic, and a relaxed and charming way with opponents and clients alike. Someone you want on your side”

      Legal 500 2021

    • "Osbornes is pre-eminent for family law in North London. Mark Freedman is a real rainmaker. He is an excellent lawyer and has a top-notch practice"

      Legal 500 2020 - Mark Freedman

    • Mark Freedman is intelligent and personable and has a good selection of high-net work cases.

      Legal 500 2020 - Mark Freedman

    • "Exceptional value for money. Highly competent and reasonably priced. Mark Freedman: one of the best in the field."

      Legal 500 2020 - Mark Freedman

    • "Client-focused. Ready to fight the clients’ corner, but also ready where possible to steer client from unnecessary dispute. Mark Freedman – very experienced, with good instinct for the eventual result. Clients love him and he thinks ahead and directs the client to the best result for the client."

      Legal 500 2020 - Mark Freedman

    • Mark Freedman is a serious player. A fearless family law litigator, who protects his clients’ interests passionately.

      Legal 500 2020 - Mark Freedman

    • Breadth of knowledge and willingness to go the extra mile is what makes it stand out. Mark Freedman – devoted to his clients

      Legal 500 2020 - Mark Freedman

    • Mark Freedman frequently takes on high-value financial and children proceedings that involve complex tax, trust and accounting issues. Sources praise the "tenacity and common sense" he brings to challenging disputes.

      Chambers UK

    • "Mark is very experienced, competent, good with clients and takes a sensible approach to cases. He knows exactly what he's doing."

      Chambers & Partners Directory 2020, Mark Freedman

    • "An exceptional outfit. They take on difficult cases, fight hard and win."

      Chambers UK

    • "The team frequently deals with cross-border estates for high–net-worth individuals."

      The Legal 500

    • "Mark Freedman is a real heavyweight litigator who has dealt with some very significant cases."

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    • "Mark Freedman boxes clever, keeps his powder dry and when it comes to the end game he negotiates a really good deal."

      The Legal 500

    • "Mark Freedman has a specific focus on high-net-worth divorces and finance cases where there are overseas assets and trusts."

      The Legal 500

    • "Lisa Pepper somehow manages to get parties to settle on matters where there isn’t much hope to start out with."

      The Legal 500

    • "Well-regarded family practice assisting clients with substantial matrimonial disputes and sensitive children proceedings."

      Chambers UK

    • "Mark Freedman draws acclaim for his work in high net worth divorce cases, including those involving company structures, family trusts and overseas assets."

      Chambers UK 2019

    • "He never gives up. He fights for you to the end and has boundless energy."

      Chambers UK

    • Mark Freedman advises high-net-worth clients and knows his stuff.

      Legal 500

    • Highly regarded for his experience as a litigation and mediation expertise, Mark Freedman is tenacious and determined. Clients really feel that he is fighting their corner.

      Chambers UK

    • Andrew handled a very complex, 3 year legal battle for me, with a tremendous amount of patience and professionalism. He is very approachable, always kept me up to date, by phone and e-mail, and responded very quickly to my queries with excellent advice, sound strategic thinking and strong letters to put the other side under pressure. With top contacts for barristers, joint experts and mediation.

      Family Department Client

    • [The Family Law department] handles significant matrimonial finance cases and complex nuptial agreements. Respected for its expertise in cross-border children law matters.

      Chambers UK

    • Mark Freedman represents high net worth clients in complex financial disputes. Sources say that "he's a determined negotiator who'll always do the very best for his clients.

      Chambers UK

    • "Mark Freedman receives a lot of instructions from clients based abroad, often relating to complex divorce proceedings. Sources say: “His main strengths are his enthusiastic passion for the job in hand and his total dedication to his clients.”

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      Legal 500 2021

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      Legal 500 2021

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      Legal 500 2020 - Mark Freedman

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      The Legal 500

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      The Legal 500

    • "Mark Freedman has a specific focus on high-net-worth divorces and finance cases where there are overseas assets and trusts."

      The Legal 500

    • "The very personable and client-focused Lisa Pepper."

      The Legal 500

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      Legal 500 2019

    • "Lisa Pepper somehow manages to get parties to settle on matters where there isn’t much hope to start out with."

      The Legal 500

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      Chambers UK

    • "Mark Freedman draws acclaim for his work in high net worth divorce cases, including those involving company structures, family trusts and overseas assets."

      Chambers UK 2019

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      Chambers UK

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      Legal 500

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