Pension sharing on divorce

Pensions can be divided on divorce or dissolution in different ways. This can apply to personal pensions, workplace pensions and the earnings-related additional State Pension (or the ‘protected element’ for people entitled to the new State Pension). What exactly can be divided depends on where in the UK you’re divorcing or dissolving your civil partnership. The different options include:

• A pension sharing order, where an individual gets a percentage share of their ex-spouse or civil partner’s pension (s). This is either transferred into a pension in their name or they can join their ex-partner’s pension scheme.
• Pension offsetting, where the value of any pensions is offset against other assets. For example, an individual might get a bigger share of the family home in return for their ex-partner keeping their pension.
• Pension ‘earmarking’, where an individual gets some of their ex-partner’s pension when it starts being paid to them. You can get some of the pension income, the lump sum or both. But you can’t get pension payments before your ex-partner has started taking their pension.

Guidance from the Money Advice Service says that the rules of the pension scheme will help inform which of these options will work best in an individual case. It recommends that individuals get professional advice from a solicitor or a financial adviser before acting.

The Pensions Advisory Service (TPAS) offers a Pensions and Divorce Guidance session for anyone who’s about to start divorce proceedings. It explains the options and the process to you. If you’d like a Pensions and Divorce Guidance session, email their booking service on virtual.appointments@maps.org.uk. There is also guidance on divorce, dissolution and separation on its website.

See also, Your options for legal or financial advice on divorce or dissolution (Money Advice Service) and Legal advice: where to go and how to pay, Commons Library Briefing Paper CBP 3207 (August 2019).