Pension sharing: what is it and how we can help

When a marriage ends in divorce, one of the key parts of the legal process is to come to a financial settlement between both parties. In order to achieve this, they will need to declare all their assets. Aside from property, pensions can be one of the biggest financial assets that either party has, especially if couples have been together a long time. If there is significant difference in financial assets between each person, one option the court has is to make a pension sharing order. This is a court order for one party to transfer a specific percentage from their pension funds to the other person.

Pension share legislation was introduced in December 2000 to ensure provision for those who had reasonably been expecting their spouse to support them in retirement and therefore had minimal retirement provision. It is a very common consideration of many divorce proceedings.

We work with many local solicitors to support their clients once the pension sharing order is made. This is often, but not always, a female client acquiring pension funds from her former husband. Our adviser Paula Crawford is a specialist in this area. She works through the process from start to finish with the client and their solicitor.

How does a pension sharing order work?

Once divorce proceedings are underway both parties must submit documents regarding all existing pension arrangements. Sometimes the parties will agree or the courts may direct parties to arrange for an independent pension sharing report to be prepared where the pension assets for both parties are included and an indication of pension sharing to equalize assets is given. This is then used to ascertain how much should be transferred from one person to the other and to consider the options available to the parties.

The pension sharing report

When working with a client we receive the pension sharing report, which reviews the pensions of both parties. Often the report will provide options as follows:

1) To equalize the capital values of the pension funds, so both parties are left with a similar capital sum
2) To equalize the income from the pension, so both parties are left with a similar income in retirement.

There are a number of considerations on which legal advice should be sought in considering the options. This includes the type of pension or pensions, the transfer values, the age of each party and the length of the marriage.

Implementing the pension share

The report will include different options to achieve the pension share. Paula will work with clients to advise which is the best option. For example, if the pension in question is a defined benefit scheme often former partners will not be allowed to join the scheme. The scheme rules may mean they have to transfer their share into a pension of their own. We can arrange that for you. Alternatively the member may be able to join the scheme under their own name.

Other types of pension are generally more straightforward to split, and normally a share would be moved into a scheme of your own.
In some circumstances, the partner may wish to access a lump sum. This is quite common where the couple is over 55. In this case one partner may need cash to help buy a new house as part of the divorce process. Paula regularly advises on the best way to draw funds for house purchases.

What happens when there are several different pensions?

This is a common situation where a couple have been together a long time. It also happens where one person has worked for a number of different employers. It can make the pension sharing process more complex. However, Paula is able to review all the pensions and advise on the most straightforward way to access the share.

Can we help you with pension sharing ?

This is a very complex area. We feel you should have the benefit of separate and specialist financial advice together with your legal advice. If you are in the process of getting divorced and you need some independent financial advice please contact Paula Crawford. She is happy to speak to you and your solicitor about any aspect of pension sharing.

Financial planning when going through a divorce

Divorce is stressful. We can at least help in taking part of that stress away for you.

Sometimes our services are needed most when our clients are going through a stressful change in their lives. Recently Paula has been advising several clients who are going through the divorce process, working with them and their solicitor. Here she offers some key financial issues to think about when you are going through a divorce or separation. She also covers what information you may need to provide for us and your solicitor to advise you appropriately.

Mortgage planning for divorce

If your separation means you need to sell your home – what your solicitor will refer to as the matrimonial home – you will need to consider whether you need a mortgage in order to buy a new property. You will also need to have an idea how much you may need.

In order to help you with this, you will need an idea of what the matrimonial home is worth, the amount of any existing mortgage and an indication of how any equity may be split between you and your ex-partner. Proof of earnings will be needed to help you obtain a new mortgage. You will also need an idea of the value of any property you are looking to buy. We are happy to talk to you about getting a mortgage in principle so you can have that conversation with your solicitor.

Pensions considerations

The value of your pension and your ex partner’s pension will be taken into account with any financial settlement. You will need to supply your solicitor with the Cash Transfer Value of any occupational and private pension schemes. We can obtain that information for you if you wish, to help you to fill in form E.

If you are allocated a pension sharing order as part of the settlement, you will need some idea of where you are going to invest that money. If you have a private pension plan it may make sense to invest it here. We can look at the amounts involved, and consider how close you are to retirement age before we advise you.

You may need to access some capital in the short term for example when you are waiting for your matrimonial home to sell. If you are over 55, you may be able to release a tax free cash sum from your pension pot to help you.


We do understand that considering your financial affairs while going through a divorce is stressful. Our aim is to help you consider all the possibilities to help you make the right decisions. We want to ensure the financial aspects of the divorce go as smoothly as possible for you.

If you would like to book an appointment with Paula to discuss any of these issues, please call us on 01543 410512. We do not ask for a fee for an initial meeting, where we can meet to check whether we can offer what you need. Any business that we conduct on your behalf will be subject to a fee. We will always advise you of up front before we start any work for you.

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