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Yes. Pensions are treated as matrimonial assets and can be divided between spouses during divorce proceedings. For many couples, pensions are the second most valuable asset after the family home.
The court has the power to make orders affecting pensions, including:
A pension sharing order transfers a percentage of your pension into your ex-spouse's name. Once the transfer is complete:
Pension sharing is often considered the cleanest way to divide pensions because it creates a complete separation.
Pensions are typically valued using their Cash Equivalent Transfer Value (CETV). This is the amount your pension would be worth if transferred to another scheme.
Your pension provider must provide a CETV on request. For divorce purposes, the CETV should be dated within 12 months of financial proceedings.
Important: For defined benefit pensions (final salary schemes), the CETV may not fully reflect the pension's true value. These pensions provide guaranteed income for life, and the CETV calculation may understate this. Expert actuarial advice is often recommended for significant defined benefit pensions.
Pensions built up during the marriage are generally considered matrimonial assets and subject to division. However, the court takes a broad view of fairness and may consider:
Long marriages typically see a more equal division of all pension assets, while shorter marriages may focus on pensions accrued during the relationship.
Pension offsetting allows one spouse to keep their pension in exchange for the other receiving a larger share of other assets.
Example: The husband has a pension worth £200,000. Instead of sharing the pension, the wife receives an additional £100,000 from the equity in the family home.
Offsetting can be simpler than pension sharing but requires careful calculation to ensure fairness. A pound in pension is not the same as a pound in cash due to:
If you divorce without a financial order that deals with pensions, your ex-spouse can make a claim against your pension assets at any point in the future (unless they remarry).
This includes claims against:
The only way to prevent future claims is to obtain a consent order or financial remedy order that explicitly deals with pensions — either by sharing, offsetting, or confirming a clean break.
At Endeavour Law, we ensure pensions are properly considered as part of your financial settlement. We can help with:
Pensions are too valuable to ignore. Contact us to discuss your situation.
