Divorce and Pensions: What You Need to Know in the UK

When going through a divorce, pensions are often one of the most valuable assets involved yet they are also one of the most commonly overlooked. Many people focus on the family home or savings and forget that pensions can be worth tens or even hundreds of thousands of pounds.

Understanding how pensions are treated during divorce in the United Kingdom is essential to protecting your long-term financial future.

Are Pensions Included in a Divorce Settlement?

Yes.

In England and Wales, pensions are considered matrimonial assets and are taken into account when dividing finances on divorce. This applies to:

• Workplace pensions

• Private pensions

• Personal pension plans

• Defined benefit (final salary) pensions

• Self-invested personal pensions (SIPPs)

Even if the pension is in only one person’s name, it may still be shared.

How Are Pensions Valued?

Before pensions can be divided, their value must be established. This is usually done by obtaining a Cash Equivalent Transfer Value (CETV) from the pension provider.

However, CETVs do not always reflect the true value of a pension, particularly with defined benefit schemes. In some cases, expert advice may be needed to ensure the pension is valued fairly.

MLS Legal helps by advising on what information is required and whether specialist input may be appropriate.

Ways Pensions Can Be Dealt With in Divorce

There are three main options for dealing with pensions during divorce:

1. Pension Sharing Orders

This is the most common and often the fairest method. A pension sharing order allows a percentage of one spouse’s pension to be transferred into a pension in the other spouse’s name.

This creates a clean break, meaning both parties have separate pensions going forward.

2. Pension Offsetting

This involves one party keeping their pension while the other receives a greater share of other assets, such as property or savings.

While this can seem straightforward, it carries risks — particularly if the pension’s value is underestimated.

3. Pension Attachment (Earmarking)

This is less commonly used. It allows one spouse to receive pension benefits when the other retires. This option does not provide a clean break and can create long-term financial dependence.

Do You Need a Court Order for Pension Division?

Yes.

Even if you and your former partner agree on how to divide pensions, it must be approved by the court through a financial consent order. Without this, pension claims can remain open indefinitely.

This means your ex-spouse could potentially make a claim against your pension in the future — even years after the divorce is finalised.

Common Pension Mistakes During Divorce

Some of the most frequent issues we see include:

• Ignoring pensions entirely

• Assuming pensions don’t count if retirement is far away

• Agreeing to offset pensions without proper valuation

• Finalising divorce without a financial consent order

These mistakes can have serious long-term consequences.

How MLS Legal Can Help

At MLS Legal, we understand that pensions are complex — and that most people have never had to think about them in legal terms before.

We help by:

• Explaining pension options in plain English

• Advising on fair pension division

• Ensuring pensions are properly disclosed

• Preparing and securing financial consent orders

• Helping you achieve a clean financial break

Our aim is to protect not just your present circumstances, but your future financial security.

Final Thoughts

Pensions are often one of the most valuable assets in a divorce, and failing to deal with them properly can lead to significant financial disadvantage later in life.

Getting clear legal advice early can make all the difference.

If you are going through a divorce and have concerns about pensions or financial settlements, MLS Legal is here to guide you every step of the way.