Pensions In Divorce

Divorce is one of the most stressful and potentially traumatic experiences anyone may face – especially when it comes to the division of assets.

One of those biggest assets is likely to be the pension or pensions enjoyed by you and your spouse. Questions surrounding pensions in divorce, therefore, tend to be complicated and risk further upset in what is already a painful process.

The wide range of services offered by Independent Pension Specialists Ltd (IPSL) may help you steer a more settling and mutually beneficial course through your divorce.

The Law

Since the year 2000, the law insists that pensions are taken fully into account in any divorce settlement.

In order to assist with that process, Courts have the power to issue Pension Sharing Orders, which, just as the term suggests, allows the pension benefits of one party to be transferred to the other as part and parcel of the divorce settlement.

Establishing Pensions to Be Divided

Although the precise rules governing the division of pensions vary according to the laws in England, Wales, and Northern Ireland and those in Scotland, the division of pensions relies on some common principles.

Amongst the first of those to be established are the nature and type of the pensions which each party has, namely:

  • Personal pension scheme.
  • Occupation pension schemes from work.
  • Any Additional State Pension (excluding the basic State Pension).

Dividing Pensions

Once the basic parameters have been established, there are a number of ways in which pension entitlements may be split:

Pension sharing

  • Just as the term suggests, this involves splitting shares in the pension between each party.
  • The respective shares are either transferred into individual pension schemes or one party joins the other’s existing scheme.

Pension offsetting

  • In this arrangement, the value of any pension scheme is offset against other joint assets of the marriage.

Deferred pension sharing

  • If the pension is to be shared but one party is already in retirement and the other remains too young to receive a pension, the latter agrees to take the pension at a later date.

Deferred lump sum

  • Similarly, this provides for the payment of a deferred lump sum when the party who has yet to retire eventually retires.

Pensions attachment order

  • Once again, this provides for a share of one party’s income or cash lump sum upon that party’s retirement at some future date.

Our Role

Our role in this process is to help guide you through some of these and the many other options which any pension sharing scheme may entail – helping you to make sense of potentially complicated and invariably stressful considerations through such a difficult process.

Our range of services includes such matters as:

  • The implementation of Pension Sharing Orders.
  • Advice on the merits of internal and external transfers as sharing options for divorcing parties.
  • Obtaining Cash Equivalent Transfer Values (CETVs), policy valuations and options from pension administrators.
  • Arranging new pension contracts for the purpose of receiving shared pension transfers.
  • Advice to transferors on the options for rebuilding their pension rights following the divorce.
  • Putting pensions into payment for recipients of transferred benefits

If you would like to discuss these matters in more detail and draw on the specialist, expert advice we provide here at Independent Pension Specialists Ltd, simply call us on 01622 238000 or complete the “Contact Us” form.

What we do

Getting the right financial advice at the right time can literally change people’s lives. This is what our business is about.

Who we work with

We specialise in working with people who are saving towards their retirement, are approaching retirement, or have recently retired.

IPSL Services

In some circumstances, more than one service or a combination of services may be appropriate.


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