FAQs: Pension Sharing in Divorce

  • I am getting divorced after 25 years of marriage. What happens to the pension I have worked all my life for? My wife has not worked; she has just looked after the children.

    You need to obtain the value of the pension fund, as the court will take into account the pension fund as well as other assets. The court will not penalise the homemaker.
  • It seems unfair that my spouse gets part of my pension.

    The starting point is that all assets accumulated since you have lived together will be taken into account upon divorce.
  • Will my ex-wife be able to claim against the money I put into the pension going forward until my retirement?

    Not if you have a clean break. When a pension sharing order is made, a percentage of your pension fund will be taken out and put into a different fund for your wife. This is then linked to her own retirement. The contributions you make going forward will be into your own scheme and you will get the benefit.
  • In addition to my final salary scheme, if I have a private personal pension is it right that my wife will not be able to claim against that?

    The court will take into account all the assets; you must give full and frank disclosure of your assets.
  • If I hadn’t married my wife, would she still be able to get a share of my pension pot?

    If you hadn’t married, your wife  could not get a pension sharing order.
  • My wife is 10 years younger than I am, does this matter?

    Yes. A pension actuary could be asked to advise on the fund you each need to have to provide equality of income on retirement.
  • I am sure that my wife has a pension fund from when she was working during  the early years of our marriage.

    The government has a tracing service to help you trace missing pensions. You can check this at www.gov.uk/find-pension-contact-details, this is free.

    This service is one of the only things that is free throughout the whole of this process.

  • Can I give my wife more of the capital that we have in the house and in our savings? I want to keep my pension.

    A pension actuary can also advise about potentially offsetting your wife`s claim against your pension by giving your wife a larger share of a different asset to balance the asset division.

    You can offer your wife other assets to offset her pension claim, this is not usually done on a pound for pound basis, the “offsetting figure is usually lower.

  • If my pension is in payment, what happens?

    If your pension is already in payment, the court can still make a pension sharing order.

Summary

It is important to note that pension sharing does not form part of every financial settlement. Sometimes it may be suitable to offer your wife a greater share of another asset by way of a cash lump sum, a higher share of the equity in property or outright ownership of property. This would be offsetting the claim against the pension.

Pensions are complex and each scheme is different. Some funds have a greater value than the cash equivalent transfer value, for example police pensions.

In view of COVID-19, it is important to check the type of pension scheme you are dealing with. Tread carefully and cautiously when dealing with pensions and take advice from an expert. At SAS Daniels LLP, we will help you choose the right expert to advise you with regards to pension claims.

For further information on pension sharing in divorce, please contact Family Law Partner, Denise Woodward on 07761 542 887 or email [email protected].