What happens to your pension in divorce?

If you are facing a divorce, or the possibility of one, your pension should be a key consideration in any financial settlement.

Pensions are often one of the most valuable assets in a divorce, usually, second only to the family home (and sometimes, they are even more valuable). Pensions are key to consider during your divorce, whether you are a spouse with much more in pension assets than the other – or a lower earner and face a major loss of retirement income through divorce.

Can I protect my pension in divorce?

Depending on your position in the marriage, ‘protecting your pension’ may mean different things. If you have been the primary earner, you will most likely have the largest pension savings, so your goal may be to keep as much of these as possible.

On the other hand, if you have been the lower earner (or have not been earning), your pension savings may be significantly lower, if not non-existent. As a result, you should aim to secure enough pension assets in the divorce financial settlement to support you in later life.

There are a variety of different ways you can protect your pension through a divorce. These include but are not limited to…

  • Financial settlement orders
  • Pension offsetting
  • Negotiations
  • Pension sharing orders
  • Pension attachment orders

Can my spouse take half my pension during a divorce settlement?

During a divorce settlement, there is often a misconception that all assets will be split 50/50, but this is not the case. The court will attempt to achieve a fair financial division by considering factors such as the couple’s income, daily expenses, the needs of both parties, and the needs of any children involved.

As a result, pensions are frequently used to offset the value of other assets. If you wanted to keep your entire pension during a divorce, your partner might get a larger share of another asset.

 Divorce and pension sharing

It is important to ensure that any divorce agreement addresses the division of pensions, as a court will look to take all pensions into account in its calculations and will assess all the assets of the marriage and try to divide them on a fair basis.

If the court decides that a pension must be shared, it will usually be required to be transferred to a new personal pension arrangement in the name of the person to whom it has been assigned to and will then be invested appropriately.


In order to do this the new pensions scheme requires sight of certain court documents before the funds will be accepted, it is this process that generally requires a financial adviser.

Veracity Financial Planning offer expert advice of monetary management during divorce proceedings. Contact our financial experts today to find out more.

ABOUT THE AUTHOR

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Woody Snapper

Woody works with individuals and business' looking for corporate finance, high net worth mortgages, complex loans, bridging loans and development finance.

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