Divorce and your pension: what you need to know

Private pensions (not the basic State Pension) usually count as part of the money and property you own with your ex-partner. This means they need to be considered when deciding how to settle your finances.   

To find out how much your pension is worth, ask each pension scheme for a ‘cash equivalent transfer value’ for divorce or dissolution purposes. You might have to pay a fee and wait up to three months to receive it. 

You can then add the value of your pensions to any other assets you own, like a house.

You'll normally need to decide how your pensions are split between you – they don’t always need to be shared equally. If you live in Scotland, only pensions built up during your marriage or civil partnership matter.

There are three options for splitting pensions:  

• Pension sharing – where all or part of a pension is transferred to an ex-partner. As you each own a separate part of the pension, you get a clean break from each other. 
• Pension attachment or earmarking – where the pension stays in the same name, but the ex-partner will get a share when it pays out. The partner who owns the pension will usually decide when it will start paying out, so this option does not offer a clean break from each other. 
• Pension offsetting – where you keep each pension in full so you get a clean break, but divide your other money and property differently. For example, if you keep a large pension pot, your ex-partner might keep your house if it's a similar value.  

The basic State Pension is separate to this and cannot be shared. But you might have to consider splitting any Additional State Pension built up before April 2016 or protected payments. 

Consider getting advice

It can be difficult to work out a fair way to split a pension, especially as they usually work differently from other money and property you own. For example, you might have to wait years for the money and pay Income Tax on anything you receive. 

To help, it’s worth considering paying for a pension on divorce expert (PODE) to create a detailed pension report for you. A PODE is normally accessed via your solicitor. See our guide about legal advice on divorce for help finding a solicitor. 

If you can reach an agreement, you usually need a court to approve it before it’s legally binding. 

If you cannot agree, or it’s not safe for you to deal with your ex-partner directly, you can ask a court to decide how your pensions should be split.

The court will usually review your finances and tell you what they believe is fair.

If a court did not approve your financial settlement when you got divorced, your ex-partner could make a claim for some of your pension at a later date. But they’d need to explain to a court why it’s appropriate after all this time.   

If a court did approve your financial settlement, it’s much harder for your ex-partner to change the terms and claim your pension now. 

If you’re worried about this happening, it’s worth seeking legal advice. See our guide Legal aid and other help if you can’t afford divorce or separation fees for more help. 

If part of a pension has been transferred to an ex-partner under a pension sharing order, or you used pension offsetting, this will not be affected if either of you remarries. But a pension attachment or earmarking order will usually stop. 

The terms of the financial settlement should list what happens if one of you marries someone else.