Pensions and divorce overview

Pensions are often a couple's most significant asset after their home, making them a key consideration in divorce financial settlements. Achieving fairness may require one spouse to transfer a portion of their pension to the other, but this must be done under a specific court order to avoid unauthorised payment charges.

As part of our Bitesize Technical series, Senior Technical Consultant, Joshua Croft looks at how the pensions on divorce rules work.

Key insights on pensions and divorce

What factors influence a fair split of pension assets?

Factors include pre-marital contributions, the age and health of both spouses, and the need for adjustments to ensure fairness.

How are pensions split in divorce settlements?

To split pensions fairly, one spouse may transfer a portion of their pension funds to the other under a court order. Without this, unauthorised payment charges may apply.

What happens if spouses can’t agree on splitting pensions?

If no agreement is reached, the court decides how to divide all matrimonial assets, including pensions, ensuring fairness.

Can all pensions be shared during a divorce?

State pensions cannot be shared, but all other pensions must be considered.

What are the three methods for dealing with pensions in divorce?

Pensions can be split through offsetting, earmarking, or a pension sharing order. These will be explained in detail in separate videos.

More Bitesize Technical

Hungry for more information? Then watch ‘Charity lump sum death benefits, explained’ – the previous instalment of our pension death benefits Bitesize Technical series.