Pensions are often the second most valuable asset in a divorce - right after the family home. Yet many couples completely overlook them until it is too late.
Whether you have a workplace pension, NHS pension, police pension, or teacher pension, understanding how pensions are divided could mean the difference between a comfortable retirement and financial struggle.
This guide explains how pensions work in divorce, what you are entitled to, and the practical steps to protect your future.
Are Pensions Included in Divorce Settlements?
Yes. Courts treat pensions as marital assets that should be shared between both spouses, even if only one person paid into them.
This applies to all pension types:
• Private workplace pensions
• Public sector pensions (NHS, police, fire service, teachers, civil service)
• Personal pensions and SIPPs
• State pensions (in some circumstances)
The starting point is equality, meaning pensions are typically be split 50/50, though courts also consider individual needs, age, and circumstances.
How to Value Your Pensions for Divorce
Before dividing anything, you need to know what your pensions are worth. This is called a Cash Equivalent Transfer Value (CETV). You will need to obtain what is called a Cash Equivalent Transfer Value (CETV) for each pension.
How to get a CETV:
• Contact your pension provider directly
• Your solicitor can request it with permission
• You need one for every pension scheme
CETVs typically arrive within 4-12 weeks although it can take much longer with certain pensions. Request them following discussion with your solicitor to avoid delaying your divorce proceedings.
Why Public Sector Pensions Need Special Attention
If either spouse has an NHS, police, teacher, or other public sector pension, the CETV often understates the true value. These defined benefit schemes guarantee income for life, often making them far more valuable than the paper value suggests.
You will likely need a pensions actuary to properly value public sector pensions. This costs (£1,500-£3,000) but prevents you from accepting an unfair settlement.
Three Ways to Deal with Pensions in Divorce
1. Pension Sharing (Most Common)
A percentage of one pension is transferred into a completely separate pension in the other spouse's name. This creates a clean financial break.
Example: Your spouse has a £200,000 pension. The court orders a 50% share. You receive £100,000 transferred into your own pension scheme.
Pros:
• Clean break between ex-spouses in relation to the pensions
• You control your own pension
• Payments do not stop if your ex dies or remarries
Cons:
• Cannot access the money until retirement age as set out in the scheme rules
• May involve transfer costs
2. Pension Offsetting
One spouse keeps their full pension, while the other receives more of the other assets like the family home or savings.
Example: Your spouse keeps their £300,000 pension, and you keep the £300,000 family home mortgage-free.
Important: £1 in cash is not the same as £1 in a pension that you cannot access for 20 years. Always get expert calculations before agreeing to offset.
3. Pension Attachment (Rarely Used)
You receive payments directly from your ex-spouse pension when they retire. The major downside is payments stop completely if they die, making this option risky and uncommon.
When Should You Address Pensions in Your Divorce?
Immediately. Pensions should be discussed in your very first meeting with a divorce solicitor.
Typical timeline:
- Week 1: Request all CETV valuations
- Weeks 4-12: Receive valuations
- Consider with your solicitor whether an Actuary report is required . This is generally recommended if there is a public sector pension, or pensions have a value over £100k. This can take 3 months or more.
- Weeks 24-30: Negotiate financial settlement
- Months 6-12: Finalise consent order and Final Order in the divorce
- After Final Order in divorce is made the pension company is served with the order and they then have 3 months to implement.
Do not wait until late in proceedings. Pension valuations take time, and rushing them creates stress and poor decisions.
How Much of Your Spouse Pension Are You Entitled To?
While 50/50 is the starting point, courts consider:
- Needs
- Length of the marriage and any pensions built up prior to the marriage
- Your age and health
- Years until retirement
- Earning capacity
- Who sacrificed career for childcare
- Other assets available
Someone who stayed home raising children whilst their spouse built up a substantial pension has a strong claim to pension sharing, even with no pension of their own.
Common Pension Mistakes in Divorce
Ignoring pensions completely
Focusing only on the house means leaving huge value on the table. Always include pensions in your financial discussions.
Assuming "my pension, your pension" is fair
Just because you both have pensions does not mean they are equal. A £100,000 NHS pension provides far better retirement benefits than a £100,000 private pension.
Waiting too long to get valuations
CETVs take weeks or months. Delaying this request holds up your entire divorce.
Accepting pension offsetting without expert advice
Trading a pension for property without proper calculations often leads to unfair outcomes years down the line.
Not checking for recent pension changes
Changes can have a significant impact as happened in recent years to Public sector pensions following the McCloud remedy (a government fix for unlawful 2015 changes). Your valuation might be understated if any changes have not been applied.
Do You Need a Pensions Expert?
For straightforward private pensions of similar value, probably not. But you should instruct a pensions actuary if:
- Either spouse has a public sector pension (NHS, police, teachers, fire service, civil service)
- Pensions have a CETV over £100k
- Pensions are the main marital asset
- There is a significant difference in pension values
- You are considering offsetting against property
- Either spouse is close to retirement
A pensions expert provides reports on true value, comparison between different pension types, and income projections for retirement. This prevents costly mistakes.
Taking Action on Pensions and Divorce
Dividing pensions fairly requires early planning and specialist advice. The steps you take now determine your financial security for decades to come.
Your next steps:
1. List all pensions held by both spouses if known (do not worry if you are unsure as this can be investigated)
2. Book a consultation and we will advise you in relation to requesting CETV valuations and whether you may need a pensions actuary
3. Consider your long-term retirement needs alongside immediate concerns
Getting expert advice early gives you negotiating power and prevents regrets later.
Call our Sheffield team on 0114 551 7555 or book a consultation online to discuss your pension rights.
Quick Answers: Pensions and Divorce FAQs
Can I get half of my spouse pension?
Potentially yes. The starting point is 50/50, but the final percentage depends on your circumstances, needs, and other available assets.
What if my spouse hides their pension?
Your solicitor can request financial disclosure. Courts can order pension providers to release information, and hiding assets has serious consequences.
How long does pension sharing take?
The pension sharing order is implemented after your Final order in the divorce is made. Pension schemes then have 4 months to transfer the pension credit.
Can I cash in my pension share immediately?
You can only access it when you reach the scheme retirement age (usually 55-67).
What happens to my pension share if my ex remarries?
Nothing. Once a pension sharing order is in place, your pension share is completely independent and unaffected by your ex-spouse future relationships.
Back to blog