Pension Sharing Order Solicitors
Pensions can be an important part of financial arrangements after divorce or the end of a civil partnership. NLS can help you understand pension sharing orders, consider the issues involved and prepare for the next steps. Please note that we do not offer legal aid for private divorce and financial matters.
Make informed decisions about pension arrangements and your future security.
Shabana Sultana
Pension sharing order advice
A pension sharing order is one way pensions can be addressed as part of a financial settlement. It provides for a percentage of one person’s pension benefits to be transferred to the other person, creating a separate pension entitlement for them.
This can be an important consideration where one person has built up more pension provision, where a relationship has lasted many years or where future retirement income is a key concern. The value of pensions should be considered alongside property, savings, investments, income, debts and other financial arrangements.
NLS can help you understand the financial issues that may need to be addressed and the options available in your circumstances.
How NLS can help with pension sharing orders
NLS can help you to:
- Understand how pensions may form part of a financial settlement
- Identify the pension information that may be needed
- Consider pension sharing alongside property, income, savings and other assets
- Understand the difference between an agreed financial settlement and an application to the court
- Consider the next steps if an agreement cannot be reached
The appropriate approach will depend on your pension arrangements, wider finances, future needs and the issues that need to be resolved.
Why pensions should be considered carefully
Pensions are often built up over many years and can be a significant source of income in retirement. They may be particularly important after a long marriage or civil partnership, where one person has taken time away from work or where the parties have different levels of pension provision.
It is not always enough to compare the current cash value of a pension with another asset. The type of pension, how and when benefits can be taken, the income it may provide in future and the wider financial position can all be relevant.
Clear information about each pension can help you understand the full financial picture before decisions are made.
What is a pension sharing order?
A pension sharing order is made by the court as part of financial arrangements on divorce or the end of a civil partnership. It sets out the percentage of a pension that will be shared. The person receiving the share is awarded a pension credit, while the original pension holder’s benefits are reduced by a corresponding pension debit.
The pension share is usually transferred into a separate pension arrangement for the person receiving it. This means each person has their own pension provision for the future, rather than one person receiving payments only when the other begins taking their pension.
The terms of any order, the pension scheme involved and the circumstances of the parties will all affect how the arrangement is put into effect.
Understanding the value of pensions
Before a pension can be considered within a financial settlement, it is important to obtain accurate information about the pension arrangements involved. This may include workplace pensions, private pensions, personal pensions and, in some cases, State Pension rights.
A pension can be one of several assets that need to be considered following divorce or dissolution. GOV.UK identifies pensions, property, savings and investments as matters that separating spouses or civil partners may need to agree.
Where finances are more complex, there may be several pension arrangements, substantial pension provision or other assets that need to be considered alongside retirement income. A clear picture of the finances can help both people understand the issues that need to be resolved.
Pension sharing and other financial arrangements
A pension sharing order is one possible way of dealing with pension benefits. It should be considered as part of the wider financial arrangements, rather than in isolation.
For example, the financial discussion may also include:
- The family home or other property
- Savings and investments
- Income and future earning capacity
- Maintenance arrangements
- Business interests or company shares
- Debts and other liabilities
- Each person’s housing and retirement needs
The right approach will depend on the circumstances. NLS can help you understand how pensions fit within the wider financial picture.
Reaching an agreement about pensions
Some separating couples are able to reach an agreement about their finances after they have exchanged the relevant information. If an agreement includes pension sharing, it must be reflected in a court order and supported by the required pension sharing annex.
The Family Procedure Rules require a financial remedy order that includes pension sharing to be accompanied by a pension sharing annex. Where more than one pension arrangement is involved, a separate annex is required for each arrangement.
Form P1 is the pension sharing annex used in connection with a pension sharing order.
An agreement about pensions should be considered carefully before it is submitted to the court. It is important to understand the pension arrangements, the proposed percentage share and how the order may affect each person’s future financial position.
When agreement cannot be reached
If you cannot agree how pensions and other financial matters should be dealt with, you may need to ask the court to make a financial order. GOV.UK explains that a financial order can deal with matters including pensions, property, savings and investments.
A financial remedy application can involve financial disclosure, discussions about settlement and court hearings if the issues remain unresolved. Pensions may be one part of a wider case involving property, income, savings, business interests or other assets.
For more information about the wider court process, visit our Financial Remedy Orders page.
Pension sharing in complex financial circumstances
Pension arrangements can be more difficult to assess where there are multiple schemes, a high level of pension provision or a wider financial picture involving substantial assets. This may include property portfolios, investments, business interests, trusts or assets held outside the UK.
In these circumstances, it can be important to consider pensions alongside the other financial issues, rather than treating them as a separate question. The NLS Private Law department can help you identify the issues that may need to be addressed and understand the options available.
For further information about divorce involving substantial or complex finances, visit our high net worth divorce page.
Shabana Sultana - Head of Private Family Law
Shabana has spent more than 26 years working solely in family law and can conduct with confidence all private family cases of every description. She specialises in financial matters following divorce and private Children’s matters with a focus on international child relocation cases are the heart of her practice. She is a natural problem solver always thinking creatively and outside the box to achieve successful outcomes for her clients. Her clients praise her for being a master negotiating who is never phased by the noise of her opponents, and this has meant she can boast a strong record of achieving out of court settlements.
Shabana works alongside an impressive team of carefully selected experts who lead with discretion and expertise including accountants, auditors, from pension actuaries to surveyors and private investigators. Twenty-six years in practice have given her a strong network of family law barristers who time after time deliver the results her clients want.
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Pension Sharing Orders FAQs
- What is a pension sharing order?
A pension sharing order is a court order that provides for a percentage of one person’s pension benefits to be transferred to the other person following divorce or civil partnership dissolution. The receiving person is awarded a separate pension entitlement.
- Can pensions be included in a financial settlement?
Yes. Pensions can be considered alongside property, savings, investments and other financial matters when a couple divorces or ends a civil partnership.
- Does a pension sharing order mean that pension income is paid directly to my former partner?
Not usually. Pension sharing provides the receiving person with their own pension entitlement. This is different from pension attachment, where part of a pension payment may be directed to the former spouse or civil partner when benefits become payable.
- Can a pension sharing order be agreed between us?
You may be able to agree financial arrangements, including pension sharing. However, pension sharing must be included in a court order and accompanied by the required pension sharing annex.
- What information is needed about pensions?
The information required will depend on the pension arrangements and wider finances involved. It is important to obtain accurate details about the pensions held before reaching decisions about a financial settlement.
- Can a pension sharing order apply to more than one pension?
Yes. Where a financial remedy order includes pension sharing in relation to more than one pension arrangement, the Family Procedure Rules require a separate pension sharing annex for each arrangement.
- What if we cannot agree about pensions?
If an agreement cannot be reached, you may need to ask the court to make a financial order. Pensions can form part of that wider financial application.
- How long does a pension sharing order take?
Timescales vary. They can depend on the financial issues involved, the information required, whether agreement can be reached, the court process and the pension scheme’s implementation requirements. It is not possible to predict a timescale without understanding the circumstances.