The Laws stipulates pensions are assets when considering financial settlements between divorcing couples.
To know how to divide pensions on divorce for a fair settlement you will need to have your pension valued and disclose the value to your spouse. We guide you on how to get the valuation and tell you what information to disclose.
Pension issues are complex. They take into account along with other assets which are available to the family. We will guide you through pension valuations. Give options that are suitable for you, so you can decide which route is right for you.
How you can use pensions in a financial settlement
There are three ways that pensions can work, as part of a financial agreement when you separate.
Pension offsetting means the value of one partner’s pension is compared to the value of the couple’s other assets, like property. When the financial arrangement is made, the partner with the pension will keep the pension and the other partner will receive something of equivalent value.
For example: It might be decided that one keeps their pension and the other keeps the house.
Pension sharing is where the value of one partner’s pension at the time of the divorce is divided between both of you. You may not receive an equal share, as a court might decide that one partner should have a greater share of the pension than the other.
If you receive a share of your partner’s pension you may have some choices as to what you can do with it. These could include:
• becoming a member of your partner’s pension scheme (if the scheme’s administrators
• transferring a sum of money to your own pension
• transferring a sum of money to a new pension you have set up
Depending on how the pension scheme works, you may receive an income and a lump sum of money once you retire. The pension scheme will probably charge you a fee for the work involved in sharing a pension.
A pension attachment means that you will receive an agreed percentage of your partner’s occupational or personal pension once they have received payment of their pension. This could be a lump sum of money or it could be a regular pension payment.
However, if your partner dies, you would not receive any more money. This is because you only receive money from an attachment order if the pensioner recieves payment.
If the order is for regular payments, these would stop if you remarry. But, depending on the terms of the order, you may get a lump sum if your former partner dies.
Knowing what your pension is worth
In the process of discussing any financial agreement, the value of your pension is likely to be an important factor.
Both you and your partner should get your pensions valued before you make any decisions or arrangements. Your pensions include any occupational and personal pensions and your state
If you have a ‘defined contribution’ pension, you can get an accurate value of your pension
from your annual statement.
If you do not have a recent statement or you have a ’defined benefit’ pension, speak to your
You can get the value of your additional State Pension by sending form BR20 to the Pension
Sharing pension information with your former partner
Your partner does not have a legal right to ask your pension provider for a valuation. But if you do use a pension as part of a settlement, you’ll need to get a court order. You will have to show the court and your former spouse or civil partner the valuation so that a fair order can take place.
If you can’t agree between yourselves, you’ll need to ask the court to decide for you
If you intend to have a pension share or attachment as part of a settlement, you’ll need a court order. The court order will tell the pension provider how to deal with the pension.
You and your partner should try to reach an agreement about what to do with your pensions. If you can’t agree between yourselves, you’ll need to ask the court to decide for you. Getting the court to decide can be stressful, as well as costing more time and money.
Mediation services can also help you when you are trying to reach an agreement about financial matters without going to court.
However, any agreements you make with your partner should still be seen by a solicitor.
A solicitor can’t guarantee that the proposed arrangements will have the approval of the courts, but they will have a good idea. They will make sure that the arrangements are fair and you understand what it will mean to you. This can help prevent any more disagreements in the future.