How are Pensions dealt with in divorce?
When a couple divorces, pensions are considered part of the matrimonial assets and can be divided between the spouses. Here’s a breakdown of how you might get a share of your spouse’s pension during a divorce:
1. Pension Sharing Order
This is the most direct way to get a share of a spouse’s pension. A pension sharing order means the court orders a specific percentage of one spouse’s pension to be transferred to the other spouse. The transferred share becomes the receiving spouse’s own pension pot—they can either leave it in the current scheme (if allowed) or move it to another pension provider.
- This order requires a court order, usually as part of a financial settlement.
- It applies to both public and private pensions (e.g., NHS, civil service, private workplace pensions, personal pensions).
2. Pension Offsetting
Instead of taking a share of the pension, the value of the pension is offset against other assets (like the family home). For example, one spouse keeps their pension, and the other might get a larger share of the equity in the house.
This is useful if you prefer an asset now instead of waiting for pension income later. However, for this you would need to obtain a proper valuation of the pension (usually by a pension actuary).
3. Pension Attachment Order (Earmarking)
This is less common. The court orders that a portion of your spouse’s pension income or lump sum is paid to you when they start drawing it.
The disadvantages of this type of order would be it does not give you a separate pension pot. In addition, payments cease if your ex-spouse dies or if you remarry and it leaves you financially dependent on their retirement decisions.
Pensions are very important as an asset within a divorce and how they should be divided, therefore, it is important to get legal advice especially as divorce and pension division can be complex. At Mackenzie & Co, we specialise in this matter and can help you understand your rights and options.
Contact us and arrange an appointment to discuss your matrimonial matter 0208 569 6289.