Your divorce and your pension

Pensions can be one of the most valuable assets you own, yet the Money and Pensions Service recently highlighted the fact that only four in ten UK adults realised a pension could form part of a divorce settlement.

When a marriage/civil partnership ends, pensions need consideration like other financial assets. It is particularly important with the gender pay gap, meaning women may have less generous pension provision.

Pension funds can be dealt with in various ways. A pension sharing order transfers part of one person’s pension to the other. Offsetting allows one party to keep their pension fund, while the other takes a bigger share of other assets, like the home. With pension attachment or earmarking, each party gets an agreed share of income in due course. Couples who are not married or in a civil partnership, have fewer legal rights, and we can provide further advice here. Please note also that the law in Scotland can differ from the rest of the UK.

Specialist advice is recommended when it comes to assessing what a pension is worth. This involves looking at more than just the cash equivalent transfer value. It is important to appraise the income likely to be produced in retirement; and the position on tax-free lump sum benefits, for example.

We are always on hand to advise on pension-related issues.​

Please note: This blog/news post provides an overview or insight only and therefore, should be viewed as being for guidance only purposes. Legislation does change and your own circumstances may differ from the situation highlighted in this blog. Therefore, before taking any action we recommend you get in touch with us to discuss your own situation.