The law’s approach to finances in divorce and dissolution is that, whether agreed in private between the parties or ordered by the court, the resulting arrangements should be fair.

The starting point to assess fairness is always a 50-50 split of the matrimonial money and assets. However, in reality, couples often do not contribute the same amount to the marriage or civil partnership. In many cases, an unequal split may be necessary to enable both parties to maintain the same standard of living once the divorce or dissolution is finalised.

A couple’s pensions will form part of their financial arrangement along with other assets such as the family home and savings. In some cases, it may be appropriate to each keep your own pension entitlements; however, in others – for example, where you have built up considerable pension entitlements, but your partner has not – it may be fairer to transfer some of your entitlements to them or otherwise find a way to provide for them in their retirement.

For further advice about pensions on divorce, please get in touch with our pensions on divorce solicitors at Crisp & Co.

There are a number of ways you can arrange and divide your pensions upon divorce or dissolution. The option you choose will depend on your individual circumstances and we can talk you through your options and provide insightful advice on which option sounds most appropriate for you.

Pensions in divorce settlements can be complex to navigate, which is why it’s crucial to seek the support of an expert.

Pension Sharing Orders

Pension sharing involves transferring a percentage of your pension to your former partner (or vice versa). This percentage will need to be transferred out of your scheme and into a new scheme or your partner can join your scheme (if your provider allows it).

Pension sharing on divorce will typically allow you to achieve a clean break from your partner – with no ongoing financial obligations towards each other – because the assets are split straight away, and you can each decide what to do with your pension share without any interference.

Pension sharing can take into account all kinds of pensions, including workplace pensions, additional state pensions, and private pensions. Basic or new state pensions are not included; however, if you are not entitled to a basic or new state pension, it may be possible to make a claim through your former partner’s national insurance.

The pensions must be valued, and then fairly proportioned. You will need to apply to court for a Pension Sharing Order and, upon assessment of the matrimonial assets, the court will make the order to transfer a percentage of the pension.

We appreciate that pensions on divorce can be difficult to navigate, and will do all that we can to ensure that the associated processes run as smoothly as possible.

Pension Offsetting

Pension offsetting is also a popular option for couples who want a clean break. It involves giving various matrimonial assets to your partner to counterbalance the value you receive from your pensions.

For example, if you decide to split your assets 50-50 and your pension is worth £150,000 while your family home is worth £150,000 (and is unmortgaged), your partner will keep the family home to offset the value you get from your pension.

Some of the benefits of this option are:

• The outcome is simple and easy to understand
• It allows both parties to continue their lives with no financial obligations towards each other
• If your pension is small, it might be easier to keep the whole thing and give your partner a different asset

One disadvantage of this option is that the value of your assets is likely to change over time making it difficult to assess whether pension offsetting is fair in your particular circumstances.

As experts in UK pensions and divorce, our team can provide all of the help that you’ll need.

Pension Attachment Orders (pension earmarking)

Pension attachment works by giving your partner an interest in your pension (or vice versa). Only when you start to draw your pension benefits will they receive their share (either in the form of monthly payments or a cash lump sum).

The drawback of this option is your partner will be tied to you for a long time even after the divorce has been finalised. Also, the non-scheme holder will often have no control over the contributions made towards the pension, how it is invested, or when they can start receiving their benefits.

It is worth noting that Pension Attachment Orders tend to be seen as an outdated option, and that other options tend to offer divorcing couples more flexibility.

If you have any questions about this type of order or would like to discuss pensions on divorce generally, please get in touch today.

If you would like to protect your pension in a divorce, it is advisable that you work with an expert divorce and pensions solicitor. Your solicitor will be able to provide guidance on how best to protect your pension, depending on your unique financial circumstances. Pension Offsetting, for example, may be a suitable option to safeguard your pension as part of a divorce settlement.

Our specialists at Crisp & Co can assess your situation, provide bespoke legal advice, and guide you to take the necessary steps.

When a couple get divorced, pensions are usually treated as part of the marital plot, and therefore, will be included as part of a divorce settlement. For this reason, you may be entitled to a portion of your ex-husband or wife’s pension.

Divorce settlements are calculated according to what is fair in the circumstances, and so this will be different for every divorcing couple. Factors that are taken into consideration when determining a fair divorce settlement include:

• How much each party earns/ongoing earning potential
• What contribution each party has made to the marriage (which includes both financial and non-financial contributions)
• Any children who are involved, and their needs

Rest assured, our pensions on divorce experts will ensure that you are well supported and that your needs are considered when it comes to dividing your pension.

It is possible that you may be able to claim part of your ex-spouse’s pension if they pass away, however, this largely depends on what type of pension they have, and the arrangements made in your divorce settlement.

To find out what your entitlements are, you will need to work with a specialist solicitor, such as our pensions on divorce experts.

When you can collect your ex-spouse’s pension depends on the arrangements agreed upon in the divorce settlement. For example, if you have agreed on a Pension Sharing Order, it is usually the case that you can collect the pension when you reach the age specified in the pension scheme.

If you have instead agreed on Pension Offsetting, you will not receive your spouse’s pension, but will instead receive different assets from the marital plot to compensate.

Pensions on divorce can be a difficult subject, which is why it’s important to work with our specialists at Crisp & Co.

If you get divorced, but do not obtain a financial settlement and a Clean Break Order, this means that your ex-spouse will be able to make a claim on your pension at any time, even if it has been many years since your divorce.

If you reach a financial settlement as part of your divorce, what will happen to your pension will be determined as part of your divorce settlement. When you split pensions as part of a settlement, you will obtain either a Pension Sharing Order, a Pension Offsetting Order, or a Pension Attachment Order.

How your claim on your ex-partner’s pension will work largely depends on which Order you have. For instance, for those who have a Pension Sharing Order, the pension entitlements for both parties are split right away, and the parties are no longer financially linked. However, with a Pension Attachment Order, the parties continue to be financially linked until the scheme holder receives the pension, meaning that their ex-spouses’ claim to the pension remains ongoing, for many years.

Every situation is unique, and so, when it comes to pensions on divorce, it is well advised to work with a specialist.

If you would like to get a pension valuation for your divorce, you will need to contact your pension provider. They will provide you with a written valuation, also known as a CEV, establishing the value of your pension fund, and what your anticipated payments are.

It is advisable to seek the support of a specialist pensions and divorce solicitor. Our team at Crisp and Co will be able to guide you through the necessary steps of valuing your pension, as well as helping you to protect your pension during a divorce.