Family Law

Pensions on Divorce in 2021 – FAQ

6 JAN 2021

When separated couples divorce, before they can reach a legally binding agreement about the resolution of financial issues or when a court application is made for financial orders, they both have to provide details of their pensions.

This is a specialist area and we recommend that you seek the advice of an experienced family lawyer and independent financial adviser before making an application to the court or signing an agreement.


Q: Can we agree that we each keep our pensions?

A: Provided you make each other aware of your pension values then you can reach a legally binding agreement that you each keep your pensions. However, if there is a significant difference in the values then the court can refuse to approve an agreed financial order where pensions are not being shared or taken into account in the division of other assets.

When you apply for the order the court requires a completed statement signed by both spouses/civil partners which includes the transfer values of pensions. This means that you are required to obtain that information about your pension and your spouse needs to be made aware of that information. If you have retired and are receiving pension benefits the pension scheme are entitled to charge to provide this information and so it is advisable to speak to a specialist family lawyer to see whether this can be avoided before incurring this cost.

Pensions are complex valuable assets and even where the scheme’s values are similar the pension benefits can be significantly different. This is an important decision that can have a serious effect on your financial future and so we strongly recommend that you obtain specialist advice before making this decision.


Q: Is my pension valuation likely to change due to the economic effect of the pandemic?

A: Pension experts (actuaries) are continuing to complete independent reports for court purposes on the values of pensions.

The current view is that the most immediate changes to valuations in pensions are likely to be for Defined Contribution/Money purchase pensions (e.g. personal pensions, stakeholder pensions and SIPP’s).

Employer’s Defined Benefit Pension Schemes valuations are also likely to change because the assets that support the scheme are likely to have fallen in value and it is becoming more expensive for these pension schemes to secure the income that must be paid out.

Public Sector Defined Benefit Pension Schemes may change in the longer term but these pension values are not likely to change in the near future.


Q: A Pension Sharing Order has been made and I am worried that it won’t be fair – what can I do?

A: The biggest concern likely to arise is whether the transfer value of the pension being shared reduces so that the benefits received are lower than the anticipated benefits.  If one former spouse/civil partner is significantly disadvantaged as a result, then it may be possible to ask the court to change the terms of the order. Please note that this is a difficult issue upon which you should seek expert legal advice.


These are not straightforward issues and so we strongly recommend that you seek advice from our experienced family lawyers before taking any action.

Our specialist family lawyers, Barbara Richardson and Nicola Codd, are available to help and are contactable on our office telephone number, by email and on Microsoft Teams, Skype and, when tier rules allow, at our Morecambe office for face to face meetings.

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