Pensions on divorce: why they matter
When a marriage or civil partnership comes to an end, one of the most important steps is agreeing how finances should be divided. Understandably, the focus often falls on the family home, savings, income, investments and immediate living arrangements. However, pensions can be one of the most valuable assets in a divorce and should be considered carefully as part of any financial settlement.
On 5 January 2026, the Money & Pensions Service published research showing that only 4 in 10 people could correctly identify that a pension could be part of their divorce settlement. This is a worrying statistic. If pensions are overlooked, one person may be left with significantly less financial security in later life, even if the immediate settlement appears fair at the time.
Pensions are not just relevant in high net worth divorces. They can be important in a wide range of cases, particularly where one spouse or civil partner has built up significant pension provision during the relationship, where one person has taken time out of work to care for children, or where retirement planning forms a key part of the overall financial picture.
Why are pensions sometimes overlooked?
Pensions can feel less urgent than housing needs, living expenses or arrangements for children. They may not be accessible for many years and can be difficult to understand, particularly where there are different types of pension schemes or complex benefits.
In some cases, people underestimate the value of their own pension or their spouse or civil partner’s pension. In others, they may not realise that pensions can be shared, offset against other assets or otherwise considered within a divorce financial settlement.
One example is a case where one party’s pension was nearly overlooked before Wansbroughs was instructed. When the pension valuation was obtained, it was highly valuable in the context of the parties’ assets and had a significant impact on the outcome of the financial settlement.
How are pensions dealt with on divorce?
There are several ways pensions may be dealt with as part of a divorce financial settlement. The right approach will depend on the circumstances of the case, including the value and type of pensions involved, each person’s income and housing needs, their ages, retirement plans and wider financial resources.
Common options include:
• Pension sharing: a pension sharing order transfers a percentage of one person’s pension into a separate pension arrangement for the other person. This can help both parties build independent retirement provision.
• Pension offsetting: one person keeps more of their pension, while the other receives a greater share of another asset, such as equity in the family home or savings. This can be appropriate in some cases, but it needs careful consideration because pension value and capital value are not always directly comparable.
Pensions are technical and sharing them can have long-term consequences. It is important to take legal advice before agreeing a settlement that excludes or offsets pension rights.
Pension valuations and expert advice
A key first step is usually to obtain up-to-date pension information, including the Cash Equivalent Value or Cash Equivalent Transfer Value. These figures can take time to obtain, so it is sensible to request them early in the process. However, the headline pension value may not tell the full story. Some pensions, particularly defined benefit or final salary schemes, public sector pensions, self-invested personal pensions, overseas pensions or pensions with complex benefits, may require specialist advice.
In appropriate cases, a pension expert or actuary can help assess the true value of the pension and the options for achieving a fair outcome. This can be especially important in high value or complex financial settlements where pensions sit alongside business interests, property portfolios, investments, inherited wealth, trusts or wider family wealth structures. In those cases, pensions should be considered as part of the full financial picture, not in isolation.
Why early advice is important
Early advice can help ensure that pensions are identified, valued and considered properly before negotiations progress too far. It can also help avoid unfair outcomes, unnecessary delay and the risk of having to revisit matters later.
Taking advice at an early stage can help you understand:
• whether pensions should be shared, offset or dealt with in another way;
• what pension information and valuations are needed;
• whether expert pension or actuarial advice should be obtained;
• how pension provision fits with housing, income and retirement needs;
• whether a proposed financial settlement is likely to meet your long-term needs; and
• how to record any agreement properly within a court-approved financial order.
Our Approach
As members of Resolution, Wansbroughs’ family law solicitors are committed to resolving family matters in a constructive and non-confrontational way wherever possible, while providing clear, strategic advice where complex finances or high value assets are involved.
We recognise that pensions can be a sensitive and sometimes overlooked part of divorce financial settlements. Our approach is to explain the options clearly, help you understand the long-term implications and ensure pensions are properly considered alongside the rest of your financial circumstances.
Where appropriate, we work alongside financial advisers, pension experts, actuaries, accountants, valuers and other professional advisers to ensure the full financial picture is understood before decisions are made.