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How are pensions divided in divorce?

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Going through a divorce and dividing up financial assets can be a difficult and emotionally challenging time for all parties involved. Once the divorce application has been submitted and provided that the application confirms that financial claims are to be made, as a spouse, you will have a right to claim against your spouse’s assets.  Such assets include (but are not limited to) property, bank accounts, investments and also pensions. Pensions can be extremely valuable assets and can also be a very complex area, therefore it might be in your interest to obtain professional legal advice in these circumstances.

You may be entitled to some, or all, of your spouse’s pension. Conversely, they might be entitled to a share of yours.

It is important to note that pensions are complex and seeking the advice of a financial adviser or legal professional is recommended. Professional divorce solicitors will help you understand the different types of pensions, how pensions are split in divorce, and the possible tax implications involved.

There are three ways in which a claim against a pension can be satisfied. These are:

  1. Pension Sharing Order
  2. Attachment Orders
  3. Offsetting

Each of these is addressed individually below.

Pension Sharing Orders

A Pension Sharing Orders (PSO) allows one spouse to receive a portion, usually expressed by way of a percentage of the other spouse's pension as part of the financial settlement. Put simply, a percentage share of the pension of Person A is transferred to Person B. This can be achieved in a variety of ways, such as transferring a portion of the pension to a separate pension plan in the name of the receiving spouse, or by creating a new pension account for the receiving spouse within the existing plan.

The main advantage of a pension sharing order is that it allows both spouses to have their own separate pension funds. This can provide greater financial security in retirement. It also avoids the need for one spouse to rely on the other for financial support in retirement. PSO’s are generally more common as they offer a cleaner break between the two parties.

Pension Attachment Orders

A Pension Attachment Order (PAO), sometimes known as 'Earmarking', requires a portion of one spouse's pension income to be paid to the other spouse. The recipient does not take a portion of the pension fund itself, but rather a portion of the pension income as and when it is paid out. The order remains in force for the lifetime of the paying spouse,  and may even continue to be paid after the paying spouse has passed away.

There are certain situations in which a PAO might be preferred. For example, if the intention is to maintain a lump sum life cover for an ex-spouse with young children, or for an older couple nearing retirement. A pension provider may recognise a spouse as a financial dependent for the payment of a spouse's pension. Some people may choose a PAO as a way of providing maintenance in retirement without transferring ownership of the pension.


Offsetting sets out to balance the value of one spouse's pension against other matrimonial assets. For example, if one spouse has a larger pension than the other, the other spouse may be entitled to a larger share of the other assets to balance the value. The spouse with a higher pension value may agree to keep their entire pension in exchange for giving up the claim to other marital assets, such as property or other big investments.

The aim of pension offsetting is to provide a fair and equitable settlement for both spouses, taking into account the full value of all marital assets. It is, of course, important to ensure that the assets being offered in exchange for the pension are of equal or greater value to the pension being given up.

Speak to our solicitors in Farnham, near Guildford and near Woking about pensions in Divorce Settlements

Financial settlements in divorce can be complex and highly emotional and seeking professional legal advice should help alleviate this for you.  We can help you understand your legal rights and obligations, explain the various options available for dividing assets, and provide guidance on the best strategy to achieve a fair settlement. Should you feel that you need help and assistance with matters such as this, please do not hesitate to contact our very friendly, professional and approachable team at BakerLaw.

You can contact your local BakerLaw office or email us at

Please note, this is intended for general information purposes only and should not be taken as legal advice. If you need legal advice about how pensions are divided in a divorce, please contact your local BakerLaw office or email us at