Pensions and Divorce: what you need to know

Your pension may understandably not be top of your list of things to think about when contemplating divorce but for women especially, it is an important aspect to consider.   Rachel Macwilliam, Family Law solicitor at Penderlaw Solicitors answers some FAQs on this topic.

Many divorced women face poverty in retirement as they often have a smaller personal pension pot.  According to the Chartered Institute of Insurance, the average man has five times the average pension pot of the average woman.  Apart from the family home, pensions are often the biggest asset so must be taken into consideration in a divorce. The main aim is to make sure that both individuals have enough money in retirement to be able to support themselves.

Does my ex-spouse have a right to my pension?
Many people getting divorced assume that when they receive their decree absolute, the finances are also concluded, and that no further financial settlements will be required.  Perhaps surprisingly, this is not the case, unless a court order has been made finalising the financial arrangement.  If this court order is not in place, and one party comes into a significant amount of wealth such as an inheritance or a pension, then the other party is entitled to make a claim.  Complications can also arise if one or both parties re-marry.

How is the size pension claim decided?
Deciding what level of claim an ex-partner has depends on several factors which are considered by the Family Court judges when dividing financial assets. Every case is different, but the Court is likely to consider the following: 

  • The length of the marriage
  • The age of any dependent children
  • The length of time since separation
  • The financial resources of each individual
  • The needs of each individual
  • Conduct of both parties

How is a pension divided between a divorcing couple?
There are 3 main ways in which pensions are dealt with following a divorce:

  • Pension sharing provides a clean break between parties as the pension assets are split immediately. This means that each party can decide what to do with their share independently.
  • Pension offsetting is where the value of a pension is offset against other assets. For example, one spouse may receive a greater share of the family home or savings to compensate for the lack of pension provision.
  • Pension attachment means that a percentage of the pension is put aside for the ex-spouse to claim on retirement. It should be noted that the benefits of pension attachment are not always certain and can be lost if the ex-spouse remarries.

Do I have an entitlement to a share in my partner’s pension if we have children but are not married?
Unmarried partners do not have any entitlement to a share in their ex’s pension on separation.

What happens if my ex-partner dies before we have agreed on splitting their pension

This will depend on where you are in divorce proceedings. You are only entitled to a widow(er)s pension if your partner dies while you are still married. If you have your decree nisi, but not your decree absolute, you are still married and will be able to claim against the pension.

However, if you have got your decree absolute but no financial order, you are not entitled to make a claim against the pension. This is why many practitioners will advise you not to apply for a decree absolute until a financial settlement has been reached.

Get in touch
If you need legal advice relating to divorce and separation our experienced and friendly family law team at Penderlaw would be glad to help.  You can call us on 01872 241408 or email family@penderlaw.co.uk