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Family Law

What happens to my pension on divorce?

Divorce and your pension

What happens to?
The most commonly asked questions from couples separating or divorcing

Friday, October 22, 2021

It is usual for your pension fund to be treated as an asset that should be divided between you and your spouse upon divorce.

This will not always happen. Particularly if you both have pension funds with a similar value. If, however, you have built up a significant pension fund during your marriage and your spouse has no or little pension provision it is likely that your pension will be divided – but only if the court considers it is fair and equitable to do so.

When deciding whether it is fair and equitable to divide your pension, the court will take into account various factors, including;

  • The length of your marriage and how much of your pension was built up before it
  • Your ages and your future earning capacity
  • Other financial assets available

How will my pension be divided?

If your pension is to be divided between you and your spouse there are several options, the most common are;

A Pension Sharing Order:

In this option an agreed percentage of your pension will be transferred into a pension fund in your spouse’s name.

A Pension Sharing Order has the advantage of providing a clean break between you and your spouse, preventing future claims against your pension and enabling you to build up your pension fund independently.

Offsetting:

With this option, you keep your pension intact or your spouse receives a smaller share of your pension, in exchange for your spouse receiving other matrimonial assets of the same value.

For example, you may forgo your share in the family home and keep your pension intact.

This option also has the benefit of achieving a clean break but if the liquid capital is limited, for example savings, this may mean you have very little capital available.

How do I decide how to share my pension ?

This decision will depend on various factors, including the rules of the pension scheme, your ages and your employment status. There is a lot to consider and you will require expert advice from a pension expert.

Contact us

To speak to one of our specialist solicitors, please do not hesitate to contact us today by calling 0191 232 8451 or if you prefer, you can email familydepartment@samuelphillips.co.uk in the strictest of confidence.

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