Divorce: How much of your husband’s pension are you entitled to?

In the UK, 71% of discussions do not take place during divorce, unless you and your ex-spouse decide to go to court to address the divorce

Consequently, there is no way of finding out how much pension you would be entitled to in the divorce. So how do you know how much pension you are entitled to? How do you find out that information?

Divorce: How much of your husband's pension are you entitled to?

Pensions count as a joint marital asset in the UK, and this should be split equally during a divorce. 

Division of marital assets can take place in a few different ways: Marital assets can be shared, or the value may be used against other assets owned, in the first instance a 50/50 split of assets should be considered.

When we divorce, am I entitled to my husband’s pension?

Yes, you will be to your husband’s pension. However, because of how marital assets are split in a divorce, you may not receive all of your share of your husband’s pension. 

Divorce settlements in the UK are dealt with a bit differently, so when you go through a divorce, all of your assets and your ex-spouse’s assets are considered when splitting marital assets.

Types of pensions that can be split

  • The pension can be split if your ex-spouse was on a personal pension scheme.
  • The pension can be split if your ex-spouse had a current or past workplace pension.
  • The pension can be split if your ex-spouse had additional state pension in place.

Pensions can be split three different ways

  • Pension Offsetting
  • Pension Sharing
  • Pension Attachment/Earmarking

Pension Offsetting

UK Divorce courts favour a completely equal split that provides a clear divide for both parties, courts will first consider any needs of any children involved in the divorce. This means that the primary caregiver of any children will either receive the marital home or a much larger share of the home if you decide to sell it. 

Furthermore, the secondary caregiver may receive other marital assets in the form of cash or pensions. In this situation, the value of the pension is offset assets of similar value. This would be the only way to split a pension in divorce proceedings that would not need a court order.

Pension Sharing

If you do require a court order to show you are entitled to a percentage of your ex-spouse’s pension, you would need a Pension Sharing order; you can only achieve this by going through court. Once the order is granted, your spouse’s pension will be in your name. You may also be able to join your ex-spouse’s pension scheme. Setting up a Pension Sharing Order requires a court order, and this cannot be sought outside of court.

Pension Attachment/Earmarking

Pension attachment is where you are awarded a share of your ex-spouse’s pension, but you are not able to access this until they start to claim their pension. You can get some of the pension income, the lump sum or both. 

However, if your partner has already retired at the point of going through the divorce, a lump sum cannot be taken from your ex-spouse’s pension if they are currently receiving an income from it.

Courts do not often favour Pension Attachment orders or ‘Earmarking’, but they are still an option, they just do not offer a clean break solution like Offsetting or Pension Sharing Orders can.

Is pension earmarking an option if my ex-spouse is a divorcee?

It is important to note that if your ex-spouse has previously been divorced and already has an ongoing Pension Attachment or Pension Earmarking order on their pension, then it is not possible to earmark their pension further. 

A Pension Attachment order can only be sought with a court order, and it cannot be applied as a portion of an out of court settlement.

Will a wife always get half of her husband’s pension in the divorce?

No, in most cases pensions are not discussed, let alone split during the divorce. There is not a way for a pension sharing order to be granted outside of court. Many divorces are dealt with outside of court.

If you decide that you and your ex-spouse require mediation, it is crucial to make sure that the topic of pension assets are raised and discussed within mediation.

There are a few exceptional circumstances that may be taken into account that could affect the amount of your husband’s pension you are eligible for and might receive in a divorce. These factors include you and your spouse’s age, both of your earning potential, the length of your marriage and how close you both are to retiring. For example, if you are younger than your husband, and he is closer to retirement than you, a court may argue that his need for his retirement money is more significant than yours. You may have the capacity and opportunity to build your retirement fund. 

If you choose to go down the route of Pension Offsetting, the court may not judge the monetary value of an asset like a house in the same way they value a Pension, mainly if the pension cannot be accessed for a few years. Someone with a pension may also have to pay tax on it, whereas someone receiving property would not pay tax.

How much of my ex-spouse’s pension am I entitled to after the divorce?

Money from a pension from a couple’s joint marital assets in divorce proceedings under UK law should, therefore, be split between the two parties. 

Divorce settlements in the UK are more than often not based on an equal split of marital assets, but this may not always happen. If there are children involved or if it was a short marriage, the division of assets may be unequal. 

For example, the primary caregiver on the children will be entitled to more assets that may be required to look after the children, for instance, the marital home or funds from the sale of the house. Courts will attempt to agree on a fair decision that will benefit both parties, but a 50/50 split may not possible.

What factors can impact the number of assets you will be given in a divorce?

  • Children – the children’s financial needs need for housing and whether the primary caregiver is in a favourable financial position to look after the children.
  • The financial circumstances of yourself and your ex-spouse.
  • How long the marriage lasted and both yours and ex-spouse’s ages.
  • The current earnings of you and your ex-spouse and the possible earning capacity of you both now and in the future.
  • If health issues are currently affecting either you, your ex-spouse or any of your children.
  • The individual assets of each person, including pensions.
  • The standard of living you have both had during the marriage.
  • The financial and practical contributions made by both of you to your family. For example, caring for children and running the household.

Private pensions, workplace pensions and additional state pension can all be split as a part of a divorce settlement. If you are in England, Scotland or Wales, it is usually the full value of combined pensions that are taken into consideration. In Scotland, it is just the worth of pensions accrued during the marriage that counts as marital assets.

The value of pensions should be added to the worth of any other marital assets, such as property, businesses, bank and savings accounts that you have. You will have to agree on how they are to be split. If you require mediation, you must have your agreed settlement signed off by the court.

You ought to get half the worth of your husband’s pension as a part of your divorce, but it will depend upon the factors named above and the way you choose to separate your marital assets on what quantity you receive and whether you receive a share of the pension or just assets up to the value of the pension.

How is the value of a pension calculated in a divorce?

Cash Equivalent Values are what is used to value a pension in a divorce, the holder of the pension will need to request this from their pension provider. It is essential to find out whether the pension comes with any guaranteed cash lump sums or other valuable guarantees.

It is highly likely that you are going to have built up over one pension over your working life, you will need to incorporate details of all of your pensions. If you have got old or lost pensions, you will be able to use the government’s free pension tracing tool to search out the main points of pension trustees, and you will have to contact them on to see if you have got a pension held with them. 

Unless you visit court, there is no automatic right for either party to disclose the quantity they need in their pension, so you may be reliant on your spouse disclosing the proper amount. There are ways during which you will protect a pension during a divorce.

How is the value of a Final Salary Pension calculated?

On account of Final Salary or Defined Benefit schemes, the Cash Equivalent Transfer Value might be utilised – it is imperative to take note that the Cash Equivalent Transfer Value does not always reflect the genuine market estimation of this sort of asset. Final Salary Schemes offer ensured, life-long income that is secured against inflation, there is also a provision included of a survivors pension for a spouse.

Pension Transfer Specialists are required to utilise a count known as Transfer Value Comparison while evaluating the correct estimation of a Final Salary Pension. This gives you a realistic gauge of the estimate of any Final Salary Pension.

If your spouse has a final salary pension, this can cause complications during the divorce and when deciding who gets what amount. That is because there is no definite pension money pot to split during the divorce that belongs to your spouse. 

However, if your spouse has a defined benefit pension, then their income from retirement is a promise from their employer and is not dependent on investments or annuity rates. It could also be linked to their final salary, which might not yet have been calculated. If that is the case, your divorce will require additional analysis and expertise; this will be costly. One option could be that your spouse makes use a cash equivalent transfer to move from their final salary pension scheme. This would give your spouse a definitive pot of pension money that would be easier to divide in a divorce. Final salary promises are the gold standard and offer a retirement income for life. It is understandable that your spouse would be reluctant to give this up and is an unfavourable option. Only a minority of people choose to utilise a cash equivalent transfer. 

If you are awarded a portion of your spouse’s pension, if the divorce ends with your spouse transferring out of his final salary pension, you will also be choosing to give up your share of an assured income for life. So this will probably not end up being the best option for you both.

Will I lose my ex-husband’s pension if I decide to re-marry?

Back when Pension Earmarking was a common way to settle a divorce, it was the case that if either spouse re-married, it would make the earmarking order null and void. However, now that Pension Sharing and Pension Offsetting is more commonly used, this is not the case. Both Pension Sharing and Pension Offsetting are a much fairer way of settling a divorce, offer a ‘clean break’ and are not affected by marriages following the divorce. 

Pension Sharing orders split the pension at the point of divorce, and you will then be put in charge of any amount of the pension you receive. 

With Pension Offsetting, you may receive other marital assets, for example, a higher portion of the share of the marital home. If you do choose to utilise a Pension Offsetting arrangement, you should make sure that you have made prepared plans for your retirement.

Key Takeaway

If you are going to divorce, it is imperative to get the right information. The information provided here is for reference only and is based on our understanding of current laws. Divorce can be expensive, and it can affect your long-term financial situation. 

Before making any decision about sharing pension at the end of a marriage, please seek advice from a divorce solicitor; especially if the final salary is to be allocated at the time of divorce.

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