In the UK, pensions are typically included in divorce settlements and can be divided between spouses. The value of pensions can sometimes exceed other marital assets such as the family home, making them a crucial part of financial negotiations.
Pensions can be divided in a number of ways:
- Pension Sharing: A portion of one spouse’s pension is transferred to the other, splitting pensions between two people.
- Pension Offsetting: Instead of splitting the pension, one spouse may keep it while the other receives a different asset of similar value, such as the family home.
- Pension Attachment (Earmarking): A court order allows one spouse to receive a portion of the other’s pension when it is paid out. This is less common.
State Pensions
The State Pension is not automatically split in a divorce. If you reach State Pension age after April 2016, you will keep your State Pension, but if you have any protected payments or additional State Pension, this could be split between you and your ex-partner.
Getting advice
It’s a good idea to seek legal guidance to ensure a fair settlement, especially if pensions are a significant part of your assets.
Updating beneficiaries and financial plans
Once you divorce, update your beneficiary details. You may have put your ex-partner and wish to update this.
You can update your beneficiary details with us on PensionsOnline.
