Pensions and Divorce

If you and your partner have decided to divorce, it’s important to think about any pensions either of you may have.  Any personal pension plans or workplace pensions will be taken into account when dealing with the financial settlement.

It’s important to know your rights at the end of a relationship.  You will only be entitled to make a claim on your partner’s pension if you were married or in a civil partnership.  Unfortunately if you were living with your partner but you were not married or in a civil partnership you will not have any legal rights to your partner’s pension.

If you a going through a divorce, pensions can be settled in three ways:

Pension Offsetting

The value of any pensions will be compared to the value of any assets you have. When the settlement is made one partner will keep the pension while the other will receive assets of the equivalent value.

Pension Sharing

You will receive a certain percentage of one or more of your partner’s pensions, and this can be transferred into an existing or new pension fund belonging to you.

Pension attachment (or 'earmarking')

You will receive an agreed percentage of your partner’s pension when it is paid to them.  This can also be applied to any tax-free lump sum available to the member, except in Scotland where such an order can only apply to the pension benefit.

Going through a divorce can be a very stressful time, without having to worry about the financial settlement, which is why it can help to get advice from a financial adviser specialising in divorce.  You should also seek advice from a family law solicitor, who can give you some guidance about divorce proceedings as a whole and can help you negotiate a fair settlement.

Questions you might like to ask a professional adviser…

  • What are my rights?
  • Do I have any legal obligations to my partner?
  • Can I replace my benefits lost as a result of a pension debit?