When people divorce it is natural to focus on the immediate problems - where you and any children are going to live, and what you are going to live on. Pensions can get forgotten. They can seem complicated, scary or just dull. They may seem too far off in the future to worry about now, when there are so many other things to think about. You may think that you couldn’t possibly make a claim against your ex’s pension because it is ‘their’ pension.

Here we explain why it is really important to think about pensions when you divorce, whoever’s name the pension is in. We also explain some other useful things to understand from the start.

Why you need to think about pensions when you divorce

• Most importantly, you will need something to live off when you want to retire or can no longer work.
• If you overlook pensions, you could end up in financial difficulties when you are older.
• Pensions can be a very valuable part of what lawyers often call the ‘matrimonial pot’. The matrimonial pot is made up of all the things of value that you own together or separately when you are married or in a civil partnership. Often people focus on the family home when they divorce. But, depending on where you live, you might be surprised to find that pensions can be worth more than the family home, especially if one person has worked for the police, armed forces, or other public service.
• When you divorce if you don’t consider pensions properly you are unlikely to get a fair outcome – whether you decide to make a claim for your ex’s pension or not. 
• If you have taken a career break to raise children or care for others, you will have a smaller pension pot or even little or no pension at all. After you divorce you may find it hard to build up a big enough pension in the remaining years you have left to work.
• If you don’t sort out pensions at the time of your divorce it can be difficult to sort them out later. 

"I had no idea that my wife or I could claim against the other one’s pension when we got divorced. I wish I had - now I am struggling for money." - Tom

The practicalities

While there are a lot of things to think about when sorting out finances with your ex, the three key things to focus on are:

1. Somewhere for you, your children (if you have children) and your ex to live,
2. Your income and your ex’s income up to retirement, and
3. Your income and your ex’s income when you both retire.

The sooner you (and your ex) start to look at pensions, and get any help you need, the better. If you leave it until the end, it will cause delay. You will need to get information from your pension provider. Some can take weeks or even months to reply to queries.

Any agreement you reach on your finances with your ex, including about pensions, will need to be approved by the court for it to be legally binding on you both.

Is it true that my ex can claim against my pension fund? Can I claim against theirs?

Yes. A pension is just like any other thing of value or 'asset' in the marriage and a judge has specific powers to share pensions (the law calls this ’pension sharing’). Or the judge can order that some or all of the benefits paid from a pension are paid to the person who doesn’t have a pension (the law calls this ‘pension attachment’).

Useful things to know from the start

• Pensions can be shared on divorce, just like other valuable things such as savings. The law calls these things of value ‘assets’. The fact that a pension is held in just one person’s name doesn’t stop it from being shared when you get divorced if this is the fairest way to meet your or your ex’s financial needs. 
• Pensions can be the most valuable things to sort out, especially if you don’t own your home. Just because it doesn’t look like cash that you can have now, it can still be really valuable - now or in the future. It is really important not to overlook pensions as an asset for your future.
• It is important not to make decisions about what should happen with other assets like the family home before you know what the pensions are worth, or worse still, overlook them altogether. If you overlook them, how will you manage when you can no longer work?
• It might feel like the pensions in your case belong to your ex, but when you are married or in a civil partnership any and all pensions are part of the matrimonial pot, regardless of whose name is on the pension plan or when the pension was built up. A pension can only be in one person’s name and often that person will see it as theirs and only theirs, especially if they built it up over a long career or before the relationship started. However, many families decide that one parent will take more responsibility for the care of the children while the other focuses on earning money or a career, giving that person more of an opportunity to build a pension. The law treats these different contributions to the family as equal. So try not to view the pension as just your ex’s, or just yours, but more as one part of the financial jigsaw that needs piecing together. This is how the court sees it, even if your ex tries to tell you otherwise. 
• Sorting out your pensions when you divorce can take a long time. You have to know what the pensions in your case are worth first and getting this information takes time. It may seem like a real effort or a hassle to get it all sorted out. But as hard as it may be at times, it is really important to be patient and stick at it - your future self will thank you!
• When you get divorced and decide to sort out your finances, you must provide your ex (and the court if the case goes to court or you ask the court to approve your agreement) with all the details of your finances. You can’t hide things of value that are just in your name, like a pension. If you do try and do this the court could make orders against you. In addition, any final agreement or order could be cancelled if one person doesn’t provide full details about their finances. That person can also be found in contempt of court. The punishment for contempt of court can be a fine, unpaid work, a prison sentence or all three.
• Pensions are complicated, and it can be especially tricky to work out how their values directly compare with each other, or with other non-pension assets, when it comes to agreeing who gets what when you divorce. A lawyer and a financial adviser who specialises in pensions will be able to advise you, if you can afford it. We understand that you may be reading this guide because you can’t afford to pay a lawyer. Or you may not want to. Through this guide we tell you when it would be really worthwhile to get professional advice, if you can possibly manage it.
• Sometimes people worry that getting advice from a professional will drag things out or be a waste of money. But, a lawyer’s job is to make sure you know your legal rights and responsibilities when it comes to sorting out your finances. And this includes pensions. A lawyer is not qualified or allowed to give you financial advice. Instead, a financial adviser, who specialises in pensions on divorce, can advise you on how to share out your pension. Getting professional help can mean things take a bit longer and it will cost some money. But getting the right professional advice can make a huge difference to how fair the outcome is and how financially secure you are when the divorce is over. Once you have got professional help, you can often reach an agreement more quickly. So, it is likely to be time and money well spent.

"I paid money into a joint account with my husband for years. Money from that account was used for his pension. When we divorced it was seen as very much ‘his’ pension. He persuaded me it was nothing to do with me. I remember he said there was no way I was getting his pension – that he had worked all those years for it. He seemed so angry. I couldn’t face rocking the boat even more. It felt like pushing it was going to use up the very last bit of energy I had. We didn’t use solicitors and I had no idea I could actually get a share of it. Now I am retired I have very little to live off. I lost everything I paid in. I wish I had faced it all properly at the time." - Valerie

I built up my pension for ages before I got married. Surely that is mine to keep?

Just because you acquired some or even all of your pension pot before you got married it doesn’t mean it can’t be shared on divorce, if that is the fairest way to deal with the case. If one person’s needs require it, the court can look at any of the things of value, called ‘assets’, to come to a fair outcome.

Marie-Anne’s story

I very much had it in my head that my husband needed his pension and that I could manage ok on mine. He had given me a bit of an idea of what his was worth over the years but he always dealt with the money side of things, so I didn’t really have a proper idea of the up-to-date value.

And as I say, I was going to leave the pensions - I hadn’t really thought about it properly if I am truly honest. If it hadn’t been for my son nagging me I would have just left it I think. Anyway, my son really wanted me to find out what the pensions were worth when we were divorcing. My husband wouldn’t give me or my son the details. He said it was his pension and what was I making such a fuss about when I had my own. I was worried about making him cross but my son said I needed to look into it properly before I could know what I should do.

In the end a judge had to order my husband to show what his pensions were worth. Turns out he had one really good pension. It was worth a lot more than mine and he had kept quiet about how much it was worth. I was glad then, even though it had felt very hard confronting him about it. I would have lost out myself, thinking I was being kind to him. Without my son and the judge helping me, I wouldn’t have the best decision. Now I am not too badly off but I would have really struggled if I hadn’t got that court order. I see now that I didn’t realise what was at stake. Really, he just wanted to fob me off till it was too late for me to do anything. Thank goodness I did something about it in time!  

Pensions can often seem bewildering and if you are not yet near retirement they can seem pretty far off - something to worry about another day. But it is really important to understand more about pensions now so you can work towards making yourself more financially secure when you are no longer working.
This section focusses on the different types of pensions you may have, to help you get a better understanding of them, before we move on to talk about the law on pensions and divorce.

"To be honest, I don’t really know what all the different pensions are - there are so many names, some much jargon - it confuses me. I just feel embarrassed and then I give up trying to understand!" - Jacob

It is normal to feel confused or embarrassed about what you do or don’t know about pensions. This section of the guide takes you through the different types of pensions you or your ex may have so you can feel more confident.

What is a pension, exactly?

Put simply, a pension scheme is like a long-term savings account that helps you save money now for when you are older. When you want or need to retire, the pension gives you money to live off.

To start with, there are two types of pensions:

• The State Pension - provided by the government, which you contribute to through National Insurance payments.
• Private pensions - these include occupational or workplace pensions set up by your employer and pensions you set up yourself.

As the State Pension only usually provides a basic level of income, the government wants to encourage people to pay into a private pension too. To encourage this type of saving for the future there are tax benefits to paying into these pensions. The government has also made it compulsory for employers to set up workplace pensions for their staff.

When you reach the age when you can claim your pension, there are often different options open to you about how to receive your money. You may be able to get a lump sum of money paid to you without paying tax on it. This is usually called a ‘tax-free lump sum’, and the amount you can get is usually capped at 25% of your total pension pot. You may also get a regular payment from your pension into your bank account to live off which will usually be taxable – in the way income is taxed when you work. This can be directly from your pension fund or from an insurance company that pays you an annuity. This is where the insurance company guarantees to pay you a regular amount of income for a set period or for your lifetime.

You can have more than one private pension and many people do, as they move from different jobs through their working life. There are lots of different types of pensions and one person may have more than one type. We talk about the different types of pensions you may come across next.

"I feel so embarrassed not understanding the options or what to do next. It is so hard to know where to start or who to turn to." - Jennie

State pensions

The State provides a pension so that people have a minimum standard of living when they stop working.

You can only get the State Pension when you reach what is known as State Pension age. Your State Pension age is linked to your date of birth and set by the government. It is quick and easy to check what your State Pension age is by looking at the State Pension age calculator on the GOV.UK website.

To get the State Pension you need to have a certain number of years where you have either paid National Insurance contributions via work, made voluntary National Insurance contributions, or claimed certain benefits that give you credits in the system. This includes Child Benefit. If you are in a situation where your ex has been earning over the limit for you as a family to get Child Benefit you still need to make a claim for it to get your National Insurance contribution years covered, you can just opt not to receive the payment. You can find out more by going to the basic State Pension eligibility section on the GOV.UK website.

The 6th April 2016 was a very important date in the world of state pensions. On this date a new State pension system was introduced in the UK. This means, depending on how old you were on that date, you are either in the old system or the new one. There are two different state pensions:

• the old State Pension (made up of the basic State Pension and the Additional State Pension)
• the new State Pension  

First, check your State Pension age and then take a look at the table below to see which pension system you are in.

How much you receive when you reach State Pension age depends on what National Insurance contributions you have made in the past, or on what National Insurance contributions you have been credited by claiming certain benefits. For more information about this take a look at The State Pension - what you might get on the MoneyHelper website.

Whether it is right to share out your pensions and how to share them will depend very much on the particular circumstances of your case. Pensions are just one part of the jigsaw when working out an agreement with your ex about your finances when you divorce.

To reach a fair agreement which sorts out your finances, including pensions, then you need to understand what the law says.

The family court’s powers

A judge has the power to share out all your income, property, pensions and savings (the law calls these things of value ‘assets’) in a way that meets the needs of your children (who are under 18) first, and then you and your ex.

The overall aim is to get a fair outcome for you and your ex. But be aware that to get to this, it doesn’t always mean that everything is shared out equally - 50/50. What someone might think of as fair when it comes to sharing the assets may well be very different to how the law views it. For example, if you built up a decent pension before you married you might think it only fair that you keep that when you divorce. This is often called ‘ring fencing’ by lawyers. But, in most cases the court will take into account all the assets to meet the needs of the children (who are under 18), your ex and you, no matter when or how they were built up. This can also include assets built up shortly after you have separated but before you have finalised your agreement or had a final financial order from the court. Be aware, though, that if you delay for years this can impact on what the court thinks is a fair outcome for you both.  

It is common for the court to take this approach unless it was a very short marriage with no children or a big money case with millions of pounds of assets to sort out. There is no set number of years that makes a marriage ‘short’ but marriages that last less than five to six years are usually considered short by the court.

The court also takes into account any time you spent living together before you got married when looking at the ‘length of the marriage’, as long as the marriage flowed seamlessly from your time living together – that is to say, there were no breaks where you lived apart before getting married.

How the court deals with the finances in a case depends on all the circumstances, such as your different needs, health, differences in age and how long you have been married (and how long you lived together without a break before you got married). If there are children (under 18), the law puts their needs first and then looks to what will give a fair outcome for the adults.

To understand more about what the law says on how finances should be dealt with on divorce take a look at sorting out your finances when you divorce.

When it comes to pensions, there are three broad ways they can be dealt with on divorce. We will look at each of these next. Which of the three ways turns out to be the best for you will depend on things:

• the type and value of the pensions,
• the other assets and income you both have and
• what your needs are.

Pension sharing (sometimes called pension splitting)

When you divorce, a judge has the power to make an order to share out your pension savings between you. This order is called a pension sharing order. A pension can only be shared if a final divorce order has been made by a judge. A pension sharing order tells the providers of a pension fund to transfer a percentage of the value (anything up to 100%) to whichever one of you is to benefit from the order. Any private pension (this includes workplace pensions) can be shared in this way and limited parts of the state pension can also be shared in this way (we talk more about this in the next section).

The pension share can sometimes stay with the same pension provider, but put into your name, but more often than not, it has to be transferred to a different scheme in your own name. This can be an existing pension or a new one that you choose. This means that you can then decide separately what you want to do with your pension pot in the future - it is your own pension. This is not then affected by your ex dying or you re-marrying in the future.

The name of this order might make you think that the income you get from the pensions will be divided equally between you and your ex but this may not the case. And even if the pension pot is shared out equally this doesn’t necessarily mean that the income you get when you retire will be the same as your ex’s. This is due to lots of different factors for example, any age difference between you and how the pension investment performs before you start receiving the pension payments. Also, if you are the one that benefits from a pension sharing order, it is important to understand that you will usually pay income tax on the money you get from the pension, after you have taken any tax free lump sum you are allowed to have. This means that the value of the money to be transferred as a result of a pension sharing order may not have the same value as money that might be kept by your ex in, say, a savings account.

It is important to be aware that a pension sharing order in itself can cause the value of the pensions that you both receive to go down. We give an example of how this happens in Clara and Thomas’ story in Stage 5.

Offsetting

"You need to keep checking your pension instead of just leaving it till you need it and then you suddenly see it’s worth nothing. If I’d reviewed as I was going along – well, I wouldn’t be where I am now - in a low place. You need a realistic idea of what you’re going to get." - Lewis

You can’t reach a fair outcome at the end of your divorce if you don’t have a proper sense of the value of all the pensions involved - yours and your ex’s. It can be surprising how much pensions are worth, both as a total fund (how much it says it is worth in your annual pension statement) and in terms of the income they will give you or lump sum payments that you may get when you retire.
Most of us do not have an accurate idea of how much our pension savings are worth. You need to find out the value of your State Pension and any private pension savings that you have. This includes occupational or workplace pensions and pensions you have set up yourself. Your ex needs to do the same. Don’t panic if you don’t know how to do this. You are not alone! This section will take you through what you (and your ex) need to do.

Try not to worry if your ex refuses to get evidence about their pensions and trying to mediate doesn’t work. If you need to, you can ask the court to order them to provide all their pension information to you and the judge. We talk more about what to do if your ex won’t communicate with you in Stage 2 - sharing your pension information with your ex.

If you have really tried to agree things but haven’t managed it, you can look at Stage 7- the next steps when you have an agreement, or what to do if you can't agree. For more on applying to the court for a financial order when you divorce see our guide on going to court to get a financial settlement.

Valuing state pensions

If you reached State Pension age before 6 April 2016 you will probably have rights to the basic State Pension, and you may also have rights to an Additional State Pension.

If you reached state pension age on or after 6th April 2016 you will probably have rights to the new State Pension, and you may also have rights to something called the Protected Payment. This is an extra pension payment because you had a very high amount of Additional State Pension before the changes to the State Pension system came in.

Use this table to work out which State Pension you will get and then see how to get a valuation or forecast for the State Pension you are entitled to. You need to get a valuation or forecast for each type of State Pension you are entitled to.

The law on sharing state pensions

Most state pensions cannot be shared between you and your ex when you divorce. But, it is still really important that both you and your ex get valuations or forecasts of all your state pension entitlements. This is because you will benefit from them in the future and so they can still be taken into account when looking at who needs what, when the divorce is finalised.

The state pensions that can be shared (with a court order) are:

• The Additional State Pension
• The Protected Payment element of the new State Pension

The only ways that the Additional State Pension can be shared on divorce are:

• If the person who is entitled to it reached State Retirement age before 6th April 2016, or
• If the application for the divorce was sent to the court and put on their system before 6th April 2016.
   

The basic State Pension cannot be shared on divorce. But, if you are in the old State Pension system you might be able to do something to increase your payments. We explain what this is next. If you know you are in the new State Pension you can skip this bit.

Increasing your old State Pension payments once you are divorced

Once you have your final divorce order, you can apply for something called ‘substitution’ if:

• You are in the old State Pension system (that is you reached State Pension age before 6th April 2016), and
• You have a lower basic State Pension than your ex, (or, if they are in the new State Pension, a lower basic State Pension than they had up to 6th April 2016) because you paid less National Insurance.

You can apply to the Pensions Service to ask for your ex’s extra National Insurance contributions to be treated as though they were yours too. This is called ‘substitution’. The really good thing about this is it can increase your State Pension payments but doesn’t change your ex’s at all. You may not know if your ex has a higher basic State Pension than you, but if your ex mainly worked through the marriage and if you had care responsibilities or did part time work, your ex is likely to have a higher basic State Pension.

To claim a substitution you need to write to the Pensions Service and ask for your basic State Pension to be increased and your National Insurance contribution record to be substituted with your ex’s record. You need to send:

• A certified copy of your final divorce order,  
• your National Insurance number, and,
• your ex's National Insurance number.

Beware that your request may be rejected, by mistake. This is because this option isn’t well known about, even at the Department for Work and Pensions. If your request is rejected, send it back with a polite letter of complaint and ask for someone more senior to look into it.

You should apply as soon as possible and ideally within three months of the date of your final divorce order, to make sure your claim is backdated to the date of your divorce. If you leave it a while before claiming it can normally only be backdated three months and so you could lose some money.

Valuing private pensions

The starting point for valuing all private pensions for the purposes of divorce is something called the cash equivalent transfer value. This type of valuation has other names too - you may hear it called the cash equivalent value (CEV), the cash equivalent (CE) or the transfer value. We are going to call it the cash equivalent.

The cash equivalent is the amount of money which the managers of your pension would have to pay into a new pension if you wanted to move to a new pension provider. It is a way of valuing your pension rights. It is a way of measuring how much the pension pot is worth at the time you ask for the valuation, not what you will get as an income when you retire. Many things affect the amount of money you will get from a pension when you retire, including what income tax you may have to pay on it.

The cash equivalent is the starting point for valuing pensions for the purposes of divorce and the court must have the cash equivalent information for all the pensions in your case if you ask for a court order - whether the order is by agreement or not. But, the cash equivalent doesn’t tell you anything about what income you will get when you retire or what other benefits the pension may give you.

You are only entitled to get one cash equivalent valuation each year free of charge for each workplace pension you have. If the pension is being paid it is likely you will have to pay for a cash equivalent valuation. There could also be a charge if you are within one year of your pension scheme’s retirement date. Valuations of defined contribution pensions, such as personal pensions, are normally free and provided quickly by the pension provider.

How to find out what your private pensions are worth

Step 1

• Make a list of all your pensions. If you have had several jobs in the past you may have lost track of some or even all of your pension paperwork. Don’t panic. You can go to GOV.UK Find pension contact details to use their online service to track down your pensions. If you prefer, there are also details on this webpage on how to call the Pension Tracing Service or where to write to for more help.
   

Step 2

• Ask your pension providers for a cash equivalent for divorce purposes for each of your private pensions. Be aware that a pension summary, pension entitlement letter or annual statement are not the same as a cash equivalent and so will not be enough. To do this you need to use a Pension Inquiry form known as the Form P for each of your pensions. Your ex needs to use the same form to get information about their pensions. If you have an annuity and it is being paid to you now you still need a valuation of this from the company that pays it to you.

Step 3

• If you have a defined benefit pension you also need to ask for a benefit statement for each pension - to see what all the benefits are, that come with your pension. There may be additional benefits such as a set income when you retire or a death in service pay out.  Your ex needs to ask for a benefit statement for each defined benefit pension too. There is a sample letter to help you when writing to your pension providers in the section at the end called Sample letters.
   

Step 4

• Ask your pension provider for a ‘full divorce transfer pack’. This is a pack of information you will need later on in the process if you ask the court to make an order about the pensions in your case. The information included in this should get sent to you when you ask for the documents in Step 2 and Step 3 but sometimes it isn’t.

This is quite a to-do list. Try not to panic. Keep a record of the information about your different pensions as it comes in – by post or email or within an online account.

We have created a checklist to record your pension information that you may find helpful to use or adapt – you can find it at the end of this guide.

Our top tips on getting your cash equivalent and pension benefit statement

• Pension providers don’t always respond quickly so you need to ask for this information as soon as possible. It can take many weeks or even months to receive it all. This can be very frustrating but don’t give up - this is crucial information you both need.  
• Pension providers can take around three months to give you the cash equivalent documentation. Keep a record of the date you ask for the information and then follow up (to check it has been received and is being dealt with). Be firm but always polite!  
• If you send your request by post, make sure you keep a copy. If you send it by email make sure you don’t accidently clear out your sent box. If you have to do your request online take photos or screenshots of what you say so you have a record.
  When you do get the information you have requested keep your paperwork tidy in a folder, so you can find it when you need it.

When you get your cash equivalent valuations and your statement of benefits for your defined benefit pension, if you have one, you need to read it all carefully. The statement of benefits will set out what, if any, extra benefits come with your pension. These extra benefits can make your pension (or your ex’s) a lot more valuable. If you struggle to work out what it means, the best place to get help to start with is from MoneyHelper. They give free pensions guidance. You can contact them in lots of different ways - depending on what suits you best.

The statement of benefits document is not easy to understand and it is likely you will need expert help if you have a defined benefit pension. We talk more about this in Stage 3 - working out if you need expert help and Stage 4 - getting expert help on pensions.

Depending on what type of pension you and your ex have, the cash equivalent information might sometimes be enough for you to negotiate with your ex and reach an agreement. To work this out though you need to know what your ex has in terms of pensions.

Make sure you have the following for all of your pensions:

• Cash equivalent valuations,
• Benefits statement for any defined benefit pension you may have,
• State Pension valuations and statements/forecasts.

When you have all of these documents you need to give copies of them to your ex.

They need to get this information together for their pensions too and then you need to agree to show each other that information. If one of you has a lawyer this will be done via them. If you agree to go to mediation the paperwork can be shared through that process. If you don’t go to mediation or have a lawyer involved you will need to agree a date and method of exchanging your financial information yourselves.

If a case like yours ends up in court, the court requires that each of you fill in a long form, called Form E, about all your finances, not just pensions. This isn’t an easy form to do without some help. We have made a film about how to fill it in and also a guide - How to apply for a financial order without the help of a lawyer - that takes you through the form, step by step.  

If you don’t end up in court you don’t have to fill in the Form E but you might find it helpful to anyway, as it shows you what level of detail is needed and gives some structure and order to the sharing of financial information. You can agree well in advance a date by when you are going to have your forms filled in and ready to give a copy to the other.

When you have swapped your information about your pensions with your ex, you are ready to work out (or get help to work out) if the information is complete and if what you have is enough or if you need expert advice on the pensions in your case. We talk about this in Stage 3 - working out if you need expert help.

The next question is whether or not you need expert help to work out if the cash equivalent valuations give a proper picture of the value of the pensions in your case. You will need to weigh up the costs of doing this with the benefits you will get from expert advice. This section looks at when it is likely to be very tricky to work things out by yourself and so will be worth getting expert help. Then in Stage 4 - getting expert help on pensions we explain more about what sort of expert you might need and how to find one.
There are several situations when the cash equivalent valuations don’t give a realistic value of your (or your ex’s) pension, particularly if they are defined benefit pensions. For a reminder on the different types of pensions you may have, take another look at Pensions - the basics.

If you do not understand the value of the benefits that come with your or your ex’s pension you may work out an agreement that is not fair. You may well do yourself out of getting a proper share of the real assets involved. This could mean you are a lot worse off when you stop working.

The table below explains when you may or will need more than just the cash equivalent valuations to get a proper sense of the value of the pensions in your case. If you find yourself in any of these situations it is likely that the money you need to spend to get expert help will be money very well spent down the line. In fact, the cost of not getting help and getting it wrong can be enormous - in terms of actual money - tens or even hundreds of thousands of pounds.

If any of the situations listed below apply to you, a good place to start for some free guidance is MoneyHelper where you can book a free pensions and divorce appointment.

Mike and Bridgette - a case study

This is not a real case but it shows a typical situation. We hope it helps to show why just using the cash equivalent valuations in some situations may not lead to a fair outcome. Be aware that this is just giving you an example of the pensions in Mike and Bridgette’s divorce. Pensions are just one part of the jigsaw when sorting out a final agreement on finances.

Bridgette is 55 years old and has an NHS pension (defined benefit pension), with a recent cash equivalent valuation of £156,300. Under her pension scheme she is entitled to a pension when she retires of £7,500 each year (she will never get less than this amount each year) and lump sum of £22,500, which she can get when she is 60.

Mike is 58 years old and has a Self-Invested Personal Pension (defined contribution pension), with a recent cash equivalent valuation of £200,000.

If just the cash equivalent valuations are used Mike has a cash equivalent valuation of £43,700 more than Bridgette. So it seems that to get to a fair outcome there may need to be a pension sharing order made in favour of Bridgette. Or maybe offsetting could take place, so that if Mike keeps all his pension Bridgette gets a bigger share of a different asset, such as any savings.

But actually, if Mike takes a lump sum of £22,500 from his pension to match that of Bridgette’s, his pension when he gets to 60 will be £5,200 each year compared with Bridgette’s £7,500 each year.

In this case, the cash equivalent valuations don’t give the full picture because the income from a defined benefit pension can be very different to that of a defined contribution pension even when the cash equivalent valuations are similar. If this couple just used the cash equivalent valuations, Bridgette would have got some of Mike’s pension when in fact her pension has more benefits and it is potentially Mike who should have a share of her pension or a greater share of another financial asset, not the other way round.

When one person (or both) has a defined benefit pension you need an expert to help work out what income both people will get when they retire so you can see what will end up being a fair outcome overall. If you or your ex has a uniformed or other public sector pension it is important to try and find an expert who has experience of advising on these types of pensions when it comes to divorce.

If you find yourself in any of the situations set out in Stage 3 you really will need to get help, if you possibly can afford to, from an expert who can assess what all the pensions in the case are really worth.

There are different names for someone who can give this kind of advice. The one we are going to use in this guide is a Pensions on Divorce Expert, or PODE for short.

There are other experts, legal and financial, that it may be very helpful to speak with too. While there may be an ideal way of having different professionals on hand to help, the approach that will work best depends on the circumstances of your case and, of course, on what you can afford.

In this next section we explain more about:

• the different professionals that can help,
• when it may be ideal to use them, if you can afford it,
• how to find them,
• the costs and time frames of using a Pensions on Divorce Expert.

The different professionals who can help you

Lawyers

The word ‘lawyer’ is often used to describe someone who is legally qualified and trained to advise and represent you if you have a legal problem. There are three main types of regulated lawyers you could go to for legal advice about your divorce. These are solicitors, legal executives and barristers. If you want to, you can find out more about these different legal professionals in A survival guide to going to court when the other side has a lawyer and you don’t.

If you can afford it, it would be really sensible to get legal advice about where you stand in terms of the finances in your divorce, as early on as possible before you make any big decisions.

A lawyer can advise you on the pensions situation in your case and recommend a Pensions on Divorce Expert to you, if they think it would be a good use of money - mainly if you find yourself in any of the situations explained in Stage 3 - working out if you need expert help. If you agree to this and can afford it, it is common for the lawyer to instruct the Pensions on Divorce Expert for you - to ask them all the right questions to get a report that helps you (and your ex) find out the  value of the pensions, for the purposes of your divorce, and how they could be split to give a fair outcome.

If you and your ex decide to ask a Pensions on Divorce Expert to help, it is usual for there to be just one expert, known as a ‘Single Joint Expert’ who writes a report for both of you (and the court, if you are going through the court process). Having just one expert who looks at the case in the round keeps the expense down and reduces the chance of conflict and delay that could increase with two different experts involved. It is usual for you to agree with your ex on which expert to use and to share the costs equally.

There are a lot of rules about how this has to be done. They can be found in Part 25 of the Family Procedure Rules 2010 and in Practice Direction 25D. Most importantly, the expert must be instructed by both of you.

The expert must be impartial when acting for both of you – they must not take one person’s side over the other. Another important rule is that all communications with the expert, however they take place, must be open and clear, to both you and your ex.

If you do use a Single Joint Expert you should:

• Always communicate in writing if possible – by email or letter so that there is a clear record of what is said.
• Include your ex or their lawyer in every communication you have with the expert. This could be by adding them to email exchanges or if you send a letter, make sure you send a copy to your ex or their lawyer. Avoid phone calls.
• Be polite when you contact the expert, for example by using their surname rather than first name.
• Make sure you discuss any new questions or requests for the expert with your ex, or their lawyer, first before bringing them up with the expert.
• Avoid telling the expert about any discussions you have that your ex’s lawyer calls ‘without prejudice’ discussions. These are negotiations or communications that are protected so that whatever you or your ex might say or do about reaching an agreement cannot be used to your disadvantage later in a court hearing. They are confidential and should not be shared with the expert.

It is also really important to understand that if you decide, by yourself, without a lawyer or without agreement with your ex, to ask a Pensions on Divorce Expert to do a report you will not be allowed to use it in court unless the court gives you permission.

You may manage to reach an agreement with your ex without needing the help of the court, even though the court will eventually have to approve your final agreement. But it is important to understand that if you do end up going to court, you will need the court’s permission to use the expert’s report within the case, otherwise it might be ignored. If the court does agree to you having an expert report in the case but finds that the expert hasn’t followed the court rules properly when preparing the report, you may have to use and pay for a different expert altogether.

When the report is done, if you can afford it, it then makes sense to get further advice from the lawyer on what would be a reasonable and fair outcome in terms of an overall agreement about finances.

You can get legal advice from any of the three different types of legal professionals listed above but often the starting point would be either a solicitor or legal executive. Barristers are usually instructed by solicitors or legal executives once a case is up and running. But some barristers now take cases direct from members of the public without a solicitor being involved. This is called ‘direct access’ or ‘public access’. You can find out more about direct access and if it is something that might work for you at the Direct Access Portal supported by the Bar Council. You may find a barrister through this route who is happy to look at your case and advise you on whether you need a Pensions on Divorce Expert to do a report and/or what might be a fair outcome in your case.

Another option to help you reduce costs at the start and to help you work out your options is to look into lawyers who may volunteer their time in your local area. For more on this take a look at the section called More help and advice.

Some family lawyers offer a particular approach to sorting out family law problems. This is called the collaborative process. To use this approach you and your ex need to agree to both find your own collaboratively trained lawyer and the four of you all meet together to work things out. This can mean the negotiations are quicker than when using a lawyer in a more traditional way. You can find more information on this approach on the Resolution website.

If you decide to use a lawyer be sure to check out our top tips for finding a good one.

Our top tips for finding a good lawyer

• You can search for a specialist lawyer near you who has been accredited by the Law Society. This means they have a significant amount of experience and expertise and have passed a Law Society assessment. There are two accreditations that family lawyers can have - the family law accreditation and family law advanced accreditation. On the Law Society Find a solicitor page you can click on ‘More search options’ on the right at the bottom of the pink box. This gives more options to choose from. Here you can tick the accreditation box for ‘Family’ or ‘Family - advanced’, or both. When you have found some accredited family lawyers near you it is a good idea to look at their website to see if they talk about dealing with pensions. Phone around and say that you think you may need to use a Pension on Divorce Expert and ask them who they work with.
• You can also look for a specialist family lawyer by searching for an accredited member of Resolution. Resolution members must commit to helping you work out your legal problem in a non-confrontational way. A green tick next to the lawyer’s name tells you that they offer legal aid. Go to the ‘Find a professional’ page then click on ‘advanced search’. Click on ‘Type of Resolution accreditation’ and then choose ‘Complex lower income financial remedies’ and ‘Pensions’.
• Shop around - the fees lawyers charge can vary a lot from firm to firm.
• Be clear about what you have to pay and when.
• Try and choose a firm of solicitors that have the Law Society Lexcel quality mark. This means the Law Society has given the firm an award to say the firm gives clients a good service.
• If you are on a tight budget then make sure you only use your lawyer’s time when you really need it. Making sure you are well prepared and organised for each time you speak with or see your lawyer will keep the costs down. For more helpful tips on seeing a lawyer take a look at How to prepare for seeing a solicitor or adviser.

If you can’t afford legal advice or you don’t want to spend what money you do have in that way, be sure to take a look at our other guides on working through the divorce process and sorting out your finances on divorce. You can find all of these and more in our Help with family problems section.

Pensions on Divorce Experts - what they are and how to find one

While a lawyer who specialises in divorce and finances can advise you on the law, they cannot give you financial advice.

Someone who is financially qualified and has experience in pensions on divorce can examine the pensions and if needs be, do a report on how they could be split. These people include:

• financial advisers or planners
• actuaries

But these experts are only Pensions on Divorce Experts as well if they are experienced in the area of pensions on divorce. Currently, there is no specific qualification that someone can get to become a Pensions on Divorce Expert. To try and deal with this, a group of judges, lawyers and Pensions on Divorce Experts called the Pension Advisory Group has written a long list of things a Pensions on Divorce Expert should be able to do if they are going to charge you for writing a report. The list is called a Self-certification of expertise. You can find it in the Pension Advisory Group’s Guide to the Treatment of Pensions on Divorce (Second Edition), Appendix D.

If you get advice from a lawyer, they are likely to recommend a Pensions on Divorce Expert who they work with. If you go to mediation it may be that the mediator can recommend one. If you decide to use an arbitrator (more about this in the next section) they can help you choose a Pensions on Divorce Expert or decide on one for you, in a similar way to a court would, if you and your ex can’t agree.

If you don’t get a recommendation and decide to find a Pensions on Divorce Expert yourself because you are in one of the situations set out in Stage 3 - working out if you need expert help, a good place to start is the Resolution website.

Some of the financial professionals who are Resolution members have a special accreditation from Resolution to say they are specialists in pensions on divorce. If you want to look for someone with this go to the Find a law professional page and click on ‘Advanced search’. Click on ‘Financial professional’ in the drop-down box box called ‘Service offering’. Then click ‘Search’. This search will bring up all financial professionals, but where they have passed the specialist accreditation in pensions and divorce it will show "Resolution accredited specialist" at the bottom of their profile.

Do be aware that there are many good Pensions on Divorce Experts who don’t have this accreditation.

Then, it is important to call around and ask some basic essential questions to work out if that professional has experience in dealing with pensions on divorce. Take a close look at their website and see what sort of work they say they do. If they say they deal with pensions on divorce and it says this somewhere prominent (rather than tucked away at the bottom of a long list), then this may be a good sign. It would be sensible to get a few quotes - just like you might if you wanted some building work done. This will help you work out the difference between a realistic cost for doing the work and something that is too good to be true.

So, there are different ways to find a Pension on Divorce Expert:

• through a specialist family lawyer,
• through a mediator,
• through an arbitrator,
• through your own research.

Be aware that there aren’t many financial professionals who are so specialised in pensions that they can call themselves Pensions on Divorce Experts. This means that they tend to take work across England and Wales, with communications by phone, email and Zoom. If you search using your postcode you may find that they are all rather far away. Don’t let this put you off. It’s possible you may not need to meet them in person often or even at all.

There is no denying that pensions can get complicated. If you can afford to, try and get a lawyer to advise you on what to do next once you have a proper sense of the value of the pensions in your case. If you cannot afford legal advice throughout your whole case, it is still worthwhile getting some at certain key points - sometimes this is called ‘pay as you go’ or ‘fixed fee’ work. This would be a good point to get advice from a lawyer - on how to divide up the pension pot in the case. 
If you are not in a position to get legal advice at this point you need to work your way through this next stage - weighing up the options on how to divide up the pensions in the case.

There are four common ways of dividing up pension funds, particularly after a long marriage. We explain these options next.

Option 1

Option 1 is to divide the pensions according to the income they will produce. If you are older and/or you have significant pension funds, then it is important to think about what both your income needs will be when you retire.

If you have both retired already, or are close to retirement, work out a budget showing your needs compared with your resources. This should tell you what income needs you each have. You can then share the pension funds in the proportions which will provide enough income to each of you to cover your retirement income needs. If there is insufficient income to meet those needs, there is rarely any reason why the shortage should fall disproportionately on only one of you.

By this stage of your life, any children you have are probably no longer financially dependent on you. This is likely to mean that your needs in retirement will be similar. So, unless there is reason not to, for example because yours was a short marriage, then a judge’s approach is often to divide the pension funds to equalise income in retirement. To do this it is likely that a pension sharing order will be needed. This is because it is highly unlikely you and your ex will both have pension pots that are worth the same. All the pensions in the case will be considered, even really small ones, to work out what will be fair in terms of a pension sharing order. So, a court order will be needed to tell one pension provider to share some of one person’s pension with the other person. (Even if the cash equivalent values are close to each other, each pension may have different benefits attached. That means the income may well be quite different).

If neither of you are close to retirement, it will probably be difficult to predict with any certainty what your financial positions and needs will be when you do retire. Again, the court will often assume that you are likely to have similar needs and so will normally share out the pensions to equalise retirement income.

How to work out what income a pension will give you

Defined contribution pensions

Your annual statement for your Defined Contribution pension gives you an estimate of what you may get as an income when you retire. But this is based on a lot of assumptions that will certainly change. Also, defined contribution pension pot values go up and down according to how the investments perform over the years. To fully understand the statement and the amount of income you may get at retirement you will need some advice from a financial adviser.

If you are trying to compare the income across different types of pensions you will need a Pensions on Divorce Expert to help you. This is because the different benefits will affect what income is produced when the pension is paid out. For example if you had two pensions giving the exact same income but one came with a benefit where each year the payments increased to recognise increases in the costs of living, that would be a more generous pension income over time.

Defined benefit pensions

Your annual statement for your defined benefit pension gives you an estimate of what you will get as an income when you retire. But you will also need to consider the statement of benefits as defined benefit pensions often come with extra benefits as well.  Really, you are likely to need a Pensions on Divorce Expert to help you work out what the statement of benefits means.

How to work out what income a pension sharing order will give you

It is very hard to work out what income you would actually get from a pension sharing order without getting an expert to help, regardless of the type of pensions involved.

When a pension sharing order is made the court requires the cash equivalent valuation of the pension to be shared and describes the share going to the other person as a percentage of the cash equivalent. The person who benefits from the pension sharing order will usually need to pay income tax on the money they eventually get.

You might expect that a 50% share of your ex’s pension pot would give you the same income in retirement. Unfortunately, it is far from being that simple. This is mainly because the person receiving the share usually has to set up a new pension pot and cannot usually buy a new pension that is as good as the original pension. This is especially the case if the pension is a defined benefit pension.  

If you think that dividing up the pension pots in your case to work out the income is the approach you need to take, you will need to get help from a Pensions on Divorce Expert. For a reminder on how to do this take another look at Stage 4 - getting expert help on pensions.

Option 2

Option 2 is to divide the pensions according to the cash equivalent valuations. The court may take this approach if:

• if the marriage is short (there is no set length of time to say what a short marriage is, but usually one that lasts less than five to six years is viewed as being short), or
• you and your ex are under 40 years old, or,
• you are a similar age and all the pensions are defined contribution pensions with no underlying guarantees, or,
• the pension pot is not large enough to justify the costs of an expert working out the division needed to equalise your incomes in retirement.

In these situations, the court may sometimes just divide the capital value of the pensions, using the cash equivalent figures, and not look at what that means in terms of income for you both when you retire.

Sometimes in a short marriage the cash equivalent of the pension pot will not be divided in half. Instead one person might get a bigger share to recognise the pension they built before the marriage. This tends to only happen when the marriage is short and there aren’t any young children. Overall, the court is always looking for an outcome that it views as fair. We talk more about this in the section below called 'Dividing pension funds unequally'.

You should only consider this option if you are sure that you do not find yourself in any of the situations set out in Stage 3 - working out if you need expert help. In those situations just using the cash equivalent valuations will probably not result in a fair outcome. Usually it is only a suitable approach if all the pensions are defined contribution pensions with no added benefits at all and it can be difficult to know if this is the situation you are in without getting advice. You should not take this option if either of you has a defined benefit pension - this includes public sector pensions.

Clara and Thomas - a case study

This is not a real case but it shows a typical situation. We hope it helps to show that dividing the pension pot equally using the cash equivalent valuation will not always mean you both get the same income when you get your pension.

Thomas is age 65 and receiving his defined benefit pension of £30,000 each year.  His ex, Clara, is age 60 and has no private pensions of her own. They want to share the income equally when they finalise their divorce. They know, from a friend who had been through it all before, that they can ask the court to share out the pension pot equally between them. Thomas gets his pension provider to send him a valuation. The cash equivalent valuation is £700,000. Thomas and Clara expect that Thomas’ income will go down to £15,000 each year and Clara’s will go up by £15,000 when she gets the pension all set up.

They decide it isn’t too complicated and they agree on what should happen, so they don’t get advice from a lawyer or a financial adviser. They apply to the court and the judge approves their agreement.

Thomas’ pension is reduced to £15,000 each year, as they expected. When the pension provider implements the order, Clara gets a pension credit of £350,000 (exactly half of the cash equivalent valuation of Thomas’ pension pot). She gets help from a financial adviser about where to place the money to get the best income.  She wants something safe and the financial adviser recommends that the safest option is to buy an annuity which gives a guaranteed income for life.  However, she is horrified to find out that her £350,000 can only buy an annuity income of £8,600 each year, which is not much more than half of Thomas’ income.

After the making of the pension sharing order, Thomas’ original pension income of £30,000 each year is now only paying £23,600 each year between them.  Once the pension sharing order is implemented by the pension provider it cannot be undone.

Both Thomas and Clara now wish they had taken some advice before deciding what to do with Thomas’ pension.

Option 3

Option 3 is to share the pensions using a capital value that is different to the cash equivalent value. You definitely need an expert to do this. Sometimes an expert does this when there are defined benefit pensions involved and where they are asked to by the people in the case or the court. But this option can lead to unintended consequences for both you and your ex.

The capital value worked out by the expert can sometimes end up being higher than the cash equivalent value of the pension pot. You might think that this higher value would then be used to work out your or your ex’s share but actually only the cash equivalent value can be shared when it comes to the pension sharing order. The expert’s calculation of the capital value has to be translated into a figure which is a percentage of the cash equivalent value. This can be confusing. Because of this, this option is less common than option one (above), where an expert works out how to divide the pension pot to give you and your ex the same income when you retire.  

Option 4

The final option is offsetting the pension pot against other financial assets. This is where you agree that one of you keeps their pension funds, or a larger share of the funds, in return for the other having other assets or a larger share of them. So, for example, if you are the parent with the main care of the children, you could keep the family home while your ex keeps the pension funds. This is one way of balancing the division of the assets between you.

However, you need to approach offsetting with a great deal of care. Comparing the value of one pension fund with another or with other types of assets is not straightforward. Also, if you are the person giving up a claim to a share of a pension fund, you run the risk of being short of income in retirement. If you are the person keeping the pension, you may have difficulty in meeting your housing needs and those of your children, if they are going to stay regularly or live with you part of the week.

If you are in late middle age it would be sensible to think very carefully about fighting to stay in the family home, that may now be too big for your needs, if this means you will lose out on a valuable share of the pension pot.

The option of offsetting falls into our list of situations where you may well need to get help from a Pensions on Divorce Expert and also financial advice, for example, on any tax issues. Take another look at Stage 3 - working out if you need expert help for a reminder of this and Stage 4 - getting expert help on pensions for more on Pensions on Divorce Experts.

This guide focuses on pensions, but remember that pensions are just one part of the overall jigsaw. All your income, pensions and any other assets such as savings and property, need to be looked at. You need to reach an agreement about what should happen to all of these and look at the whole picture as it will be for each of you when your divorce is finalised.
You can come to an agreement:

1. between yourselves, or

2. in mediation or another form of dispute resolution,

3. using lawyers to negotiate on your behalf, or

4. a combination of all these.

However you do it, you will both need to compromise. It might feel like reaching an agreement is impossible right now. But even if you do go to court, it is important to understand from the outset that very few cases end up going to what is known as a final hearing where the judge decides what should happen for you. Instead, you are encouraged to reach an agreement and compromise at every stage. And the court has powers to pause the case to ask you both to try and reach agreement outside of the court process if you can't show that you have already tried to, via mediation or another type of dispute resolution process.

How mediation can help

Mediation can be very helpful for many separating couples. Mediation is voluntary and has to be safe for everyone involved.

The best way to find out if mediation might work for you is to attend a Mediation Information and Assessment Meeting (known as a MIAM) with a Family Mediation Council Accredited Mediator.

Be aware that if there was or still is any form of domestic abuse or control in your relationship mediation may well not be suitable. A mediator can help you work this out if you are not sure.

A mediator can give you both general guidance on the law and what a court is likely to consider fair. But a mediator cannot give you legal advice and so they cannot tell you if the agreement you are reaching is the fairest outcome for you. So, it is usually wise to check any potential agreement with a lawyer if you can possibly afford it.

If you cannot agree things with your ex and you want to ask the court to decide how to share out your assets, then you will have to attend a Mediation Information and Assessment Meeting (MIAM). This meeting enables you to find out more about how mediation works, including whether it is right for you, how long it is likely to take and how much it is likely to cost.

A MIAM is not mediation. It is a meeting which happens before any mediation sessions, between just you and the mediator, where you find out about how mediation can help.

If you end up applying to court about your finances the judge will expect you to have tried mediation or another type of help to sort out your dispute. Lawyers call this ‘non-court dispute resolution’ or NCDR for short.

Our guide to family mediation explains more about NCDR.

It is important to know that the judge can put your application on hold until you have tried mediation or other help out of court to sort out your finances. If the judge thinks you haven’t tried to resolve your problem out of court, and you don’t have a good reason for this you can be ordered by the court to pay extra costs.

In some situations, you do not have to attend a MIAM before you send your application to the court, for example, if you have suffered domestic abuse. For a list of all the situations that make you exempt from going to a MIAM see p7 of the court application for a financial order.

If you do decide to try mediation or another type of dispute resolution process do be aware that the person involved is unlikely to be an expert in pensions. This means that you cannot rely on them alone to help you understand what you might be keeping or giving up in relation to any agreement on finances where pensions are involved. A mediator can explain to you how lawyers and pension experts can be involved in the mediation process, if you can afford to use them.

No matter how you work out an agreement, you must provide your ex (and the court if the case goes to court) with all the details of your finances. This is a very important rule in the family court and is called ‘full and frank disclosure’. You can’t hide, for example, things of value that are just in your name, like a pension. It is not possible to reach a fair outcome if either, or even both of you, don’t fully share information about your finances. The full and frank disclosure rule applies to serious or life limiting health problems and new relationships too. The court takes this very seriously. If it can be shown that one person has failed to follow the rules the court can:

• Make orders against you such as costs orders where you are made to pay your ex’s costs of going to court.   
• Cancel any final orders made if one person hasn’t provided full details about their finances, and
• That person can also be found in contempt of court. The punishment for contempt of court can be a fine or a prison sentence or both. 

To read more about these different ways of reaching an agreement take a look at the section called Ways of sorting out your finances in A survival guide to sorting out your finances when you get divorced. The next few sections of that guide then tell you about what the law says, to help you have a better understanding of what a fair outcome overall might look like in your case, with some examples.

If you do decide to work out an agreement yourselves or with the help of a mediator, it is sensible to both take a bit of legal advice first, to know what you should be aiming for. Take a look at the section called More help and advice for details of how to find a lawyer who specialises in family law and in pensions in particular.

Do we have to go to court?

No. It is usually better if you can reach an agreement together about how to share your assets, perhaps with the help and advice of solicitors and/or a mediator. Using a solicitor doesn’t mean you have to go to court, but it is important to remember that to sort out your finances properly with a legally binding agreement you need to put the agreement into the form of a draft consent order for the judge to approve. For more on this see Stage 7 - the next steps when you have an agreement, or what to do if you can’t agree.

Another option is arbitration. This is a way of resolving a dispute outside a formal court room but with the help of a qualified arbitrator who makes a decision that you are bound by. The process can be quicker than going through the court process as you decide who the arbitrator will be and agree the timetable yourselves. You can also narrow down the issues you want the arbitrator to look at which may make it cheaper than a longer drawn out court process. There is a helpful guide all about this approach on the Institute of Family Law Arbitrators website.

Lee’s story

When we had our son my wife had to go back to her teaching job full time. As I was able to reduce my hours, we agreed I would do most of the week day childcare. Over the years this of course had an impact on my pension pot. My wife was able to really grow her pension, while mine didn’t really increase much at all.

Later on we separated. My wife was very clear that her pension was ‘her pension’ - she had no intention of sharing it with me. She said she had worked hard to build it up and it was in her name, not mine. She seemed furious at my suggestion that I might need some of it to live off when I stopped working altogether. She didn’t or wouldn’t see that my caring for our son for all those years had impacted on my chance of getting well-paid, full time work once he was older.

To start with I was very angry but when I calmed down and got some advice from a solicitor I realised there was something I could do about it. Often you hear people say the law always helps the wife when couples divorce. But actually, the law makes sure the person who hasn’t had a chance to build up a pension isn’t just left with nothing in retirement. This can often be the wife, but it wasn’t for us.

What to do next depends on if you have managed to reach an agreement with your ex on how to settle finances, or not.

If you have an agreement, read this bit on what to do next. If you haven’t managed to reach an agreement skip to the bit called 'What to do if you can’t agree'.

What to do next if you have reached an agreement with your ex

If you have managed to reach an agreement with your ex about your finances the next step is to finalise it through the court. To do this your agreement needs to be turned into what is known as a ‘consent order’.

Consent orders

A consent order turns what you have agreed between you into a court order. Your agreement without a consent order is informal, not final, and usually not legally binding on you. This means it cannot be enforced by the court (although in some situations the court may be willing to turn a clear agreement into a consent order if one person was unreasonably trying to get out of it).

For your agreement to be made into a court order, it has to be written down in a particular format and sent to the judge to consider and approve. You usually don’t have to go to court yourself for the judge to do this.

When a consent order is made the court can make sure that what you have agreed actually happens. And, if the consent order is done properly (by a family lawyer), neither person should be able to ask the court to make a different financial order in the future.

Without a consent order, (or a final order made by the court at a final hearing), it is always possible for either you or your ex to apply to the court for something different to what you originally agreed, even long after you are divorced. This right is only lost when you remarry (although an exception to this rule is that the court can make pension sharing or attachment orders even when someone has re-married).

If you have agreed that you want to share a pension, then you will always have to get a consent order because the pension provider has to receive an order from the court before they can share the fund.

So, it is important to put any agreement you reach into a draft consent order for the court to approve if you want to:

• Make your agreement legally binding on both of you.
• Be able to enforce the order, if for example your ex does not do what they agreed to do such as pay you maintenance or a lump sum.
• Get an order that enables a pension to be shared between you.
• Bring to an end the right that you both potentially have to ask the court for a financial order at a later date.

Assuming the court approves your agreement, you will then have a legally binding order that you can both rely on. Depending on what it says in your consent order one or both of you will probably have a few more tasks to do – for example, you may need to get the family home on the market for sale or ask a pension provider to action a pension sharing order. Lawyers use the word ‘implementation’ to describe the stage when you take steps to put the consent order into action.

Next, we explain:

• how to prepare and apply for a consent order,
• when to apply for your final divorce order,
• how to make sure any pension sharing order actually happens or is ‘implemented’, and,
• the impact of a pension sharing order.
   

How to prepare and apply for a consent order

Step 1 - applying for your divorce

Before you can apply for a consent order to finalise your financial agreement one of you needs to apply to the court for a divorce. Or if you agree, you can make a joint application with your ex. There are various stages to getting a divorce. The court can only look at your application for a consent order when you have reached the conditional order stage of the divorce (or dissolution if you are ending your civil partnership). This takes some time so if you haven’t applied for a divorce yet, you need to start there. For more on this take a look at our guide How to get a divorce or end a civil partnership.

To get a consent order, you must apply to the court by sending in the draft consent order and other paperwork the court needs. Preparing even a simple draft consent order that will be accepted by a judge is not an easy task at all. You may well need some, or even a lot of, help from a lawyer.

It is also sensible to get legal advice on what you have actually agreed with your ex. It might be that there are things that you have not thought of, or are not aware of, that leaves one of you worse off. Without input from a lawyer on the fairness of the agreement there is a risk that a judge will look at the agreement and decide that it does not result in a fair outcome overall and will not approve it. If the judge refuses to make the order you have asked for, they will send it back to you and ask you to change it. Or, the judge may make the order without knowing that there were other important things missed out. This could cause you problems down the line. It’s better to be well informed before you spend time, money and energy applying to court. If you do need to start again you will probably need legal advice on how to reach an agreement the court will approve. This will take time and money.

You can find out more about getting expert legal advice on your agreement and help drafting a consent order in the section called Consent orders in our guide How to apply for a financial order without the help of a lawyer.

Step 2 - things to sort out if you are going to ask the court to make a pension sharing order

If your agreement with your ex does not include asking the court to make a pension sharing order you can skip this bit and go on to Step 3.

If your agreement with your ex includes asking the court to make a pension sharing order, there are forms you need to fill in and send to the court. There are important things you need to do before you can complete these forms.

Working out where the value of your pension sharing order will go

When the court makes a pension sharing order, that order gets sent to the pension fund manager and they have to make sure the pension share actually happens. This is known as ‘implementing’ the pension sharing order. Various things have to be arranged in advance for this to work. These are:

1. Where is the money, known as the ‘pension credit’, from the pension going to go?
2. How are the charges (if there are any) for the work carried out by the pension provider going to be paid?

If you are going to benefit from the pension sharing order where money, also known as ‘pension credit’, is taken from your ex’s pension, you need to work out where this is actually going to go.

One option is where the pension provider creates a pension for you within their scheme that is separate from your ex’s pension. This is known as an ‘internal transfer’. But, most pension providers, unless they are public sector pension schemes, will not do this - instead they say you need to transfer it to a pension scheme of your own. This is known as an ‘external transfer’. If you already have a pension scheme you may be able to get the money transferred to that pension scheme, if it is suitable. But if you don’t, you will need to set up a new pension scheme. It is a good idea to get independent financial advice on choosing a new pension scheme. This is because you are making a financial investment. When you do this the value of whatever you invest, in this situation a pension pot, can go up but it can also go down and essentially that means you can lose money. A lawyer cannot give you financial advice.

You might find that the pension provider offers you the choice of an ‘internal’ or ‘external’ transfer. And you will need to decide if you want your share of the pension to stay with your ex’s pension provider or if you want to move it to a different one. Deciding which will give you the best outcome financially is very difficult without advice from a financial adviser who specialises in pensions on divorce.

When you have worked out where your share of the pension is going to go you need to get it all set up so that you have the actual details of the new pension fund. You need to give these details to your ex’s pension scheme so that they can implement the pension sharing order and transfer the money to your chosen pension scheme. If it is an internal transfer, they keep the money in their scheme but in your name.

Many pension providers charge a fee for the work they have to do to make the pension share happen - this is known as ‘implementing’ the pension sharing order. You will see what charges the pension provider charges in their answers to your Form P and in their transfer value divorce pack. The fees vary a lot, from no fee at all to around £4,000.

You need to discuss how you will divide these charges between you and your ex. Usually these fees are divided equally between you. It is a good idea to find out from the pension provider how much the charges are in advance, so that you and / or your ex are ready with the money when you need to pay.  The person receiving the pension share can often have their share of the fees deducted from their pension share before it is transferred to their new pension.

Sometimes paying this fee is the very last thing that has to be done in the divorce process. Some people can be difficult about paying the money, to hold up the process and to upset the person who will benefit from the pension sharing order. This can be a way of trying to control the other person right until the end of the marriage.

If you think your ex may behave in this way it is possible to ask that they give something called an ‘undertaking’ to the court. An undertaking is a formal promise to the court which can be enforced like a court order. A person who breaches an undertaking can be found to be in contempt of court and punished with a fine or a prison sentence or both. In this situation if you are worried your ex might hold things up, they could give an undertaking to do all that is necessary to ensure that the pension sharing order is implemented.

Step 3 - paperwork you need to agree on and complete

• Draft consent order - this document needs to be written up in the format that the court will accept. You will need the help of a lawyer to do this. When you and your ex have agreed the final version you both need to sign it.
• Statement of information for a consent order (D81 form) - this is a document that sets out both your financial circumstances. You need to fill this in very carefully using accurate figures from your paperwork about your income, property, savings and pensions etc. The figures that go in this form are the figures about your financial situation at the time you fill it in and then you are asked to put in figures about how your financial situation will be after the order is made. You just need to put in figures about your situation and then your ex will put in their figures. Or the other way round. When each of you has filled this in you need to sign to say you have seen the other person’s financial information. You also need to sign the statement of truth in the form, to confirm that the information you have provided is complete and true. Again, this form isn’t straightforward so it can be money well spent to have a specialist family lawyer help with this.
• Pension sharing annex (Form P1) or pension attachment annex (Form P2) - this is an extra form that tells the court about the details for making the pension order actually happen. This form then gets sent to the pension provider so that they have all the details they need to make the pension order to go ahead. This form isn’t straightforward either so it can be money well spent to have a specialist family lawyer help with this.
• It is sensible to send a copy of the consent order you want approved and the pension sharing annex to the pension provider before you send your application to the court in case they object for some reason or have other issues. It is not helpful to find this out after you have applied to court! In the unlikely event that you are applying for a pension attachment order you must send a copy of the consent order and the annex to the pension provider first. If there is enough time try and get a response before you apply to the court. Chase the pension provider until you get a reply.
• Form A - this is the form that tells the court you want to apply for a consent order. (There are lots of pages in this form about going to mediation but don’t worry if you haven’t - you do not need to when you are applying to the court for a consent order). To apply for a consent order one of you needs to take the lead and become the ‘applicant’ - even though you have reached an agreement you cannot apply together.

Step 4 - preparing your application for a consent order and sending it to the court

When you have heard back from the pension provider that they have no objections to your draft consent order you can take the next step of finalising all the paperwork and sending it to the court.

To ask the judge to look at and approve your draft consent order you need to prepare and send the following to the court:

• Draft consent order - signed by both of you, plus two copies.
• Statement of information for a consent order (D81 form)
• Form A - this is the form that tells the court you want to apply for a consent order.
• Pension sharing annex - Form P1 - if you are asking the court to make a pension sharing order or Form P2 if you are asking the court to make a pension attachment order.
• The court fee - £53, or the help with court fees form if you are on a low income.
   

If you can afford to get any help from a specialist family lawyer with these documents, it will be worthwhile. It is not a simple process and they can help guide you through it. You may find a lawyer who is happy to do bits of the work and suggest where you can save costs by doing the less complicated bits yourself. Even if you end up doing most of it yourself, it would be a really good idea to get it all checked over by a lawyer before you send it to court. That way you can be sure that the draft consent order sets out what you need it to, so that you don’t end up in a financial position that you were not expecting. Also, a lawyer can pick up on any errors so the application is less likely to be rejected by the judge - which will of course save you time and stress in the long run.

When all the documents are ready make a copy for your own records. Then you need to send all the paperwork and the fee (or help with court fees form) to the court. You can find the address details at the end of the Form A application.

Top tips!

• Make copies of all the documents you send to the court.
• Make a note of the date when you send your documents to the court so that if you need to contact them you can be sure of when you sent it all in.

What happens next

The court will put your application on their system and then a judge will look at it - this could take around a few weeks but it could take a lot longer depending on how busy the court is.

If the judge has all the necessary information they need and agrees that the draft consent order will give you both a fair outcome they will approve it. Then the court will send copies of the order to you and your ex.

Top tips!

• Take copies of the order - you will need to send a copy to other people, such as a pension or mortgage provider.
• Keep the order and the copies in a safe place.
   

If the judge refuses to approve the consent order you will probably need to get legal advice on how to change it in line with whatever comments the judge made when they rejected it. Take a look at the section called More help and advice on how to find a good lawyer.

When to apply for the final divorce order

For more help on pensions generally, the place to go is the MoneyHelper website. MoneyHelper offers free helplines for you to get help about pensions generally. There are different numbers to call depending on your situation. The helplines are open from 9am to 5pm, Monday to Friday (except public holidays):

• Pensions Helpline: 0800 011 3797
• Self-employed Helpline: 0345 602 7021
• Overseas Helpline: +44207 932 5780 Web chat is available Monday to Friday 9am – 5pm (closed on bank holidays.

If you are aged 50 or over you can get free and independent guidance from Pension Wise about decisions around your pension if it is a defined contribution pension. They cannot help if you have a defined benefit pension. They offer a free 45-60 minute appointment with a pension specialist. You can book an appointment on their website or by calling 0800 138 3944 between 8am to 6.30pm, Monday to Friday. You will then get an email to confirm your booking.

For more help about pensions and your divorce, you can also go to MoneyHelper. They offer a free appointment with one of their advisers who specialise in pensions and divorce issues.

If you found our guide useful but you want more information on how to deal with pensions on divorce you can find more details in a report published by the Pension Advisory group called A Guide to the Treatment of Pensions on Divorce. The Pension Advisory Group’s report is written for people working in this area, such as judges, lawyers and Pensions on Divorce Experts. Our guide is based on their report.

If you think you may need to complain about a pension scheme provided by your employer or a pension you have set up, you can contact The Pensions Ombudsman. They offer a free and independent service. You can phone them for help on 0800 917 4487, Monday to Friday, 10am-2pm or email [email protected]

For help on finances more generally the MoneyHelper website has useful sections on money and pensions and money and divorce. They also provide free and impartial money advice by phone, webchat, Whatsapp or an online enquiry form. Call their free helpline on 0800 138 7777 (Typetalk: 18001 0800 915 4622), Monday to Friday, 8am to 6pm. Their webchat service is available Monday to Friday, 8am to 6pm. Helpline and webchat services are closed on Saturday, Sunday and Bank Holidays.

For help with benefits, the charity Turn2us offer support around working out what benefits to claim or grants you may be able to get if you are struggling financially.  They have an online benefits calculator and grants search option. If you struggle with using these services online they also have a helpline.

For free initial legal help LawWorks might be a good place to start. LawWorks supports a network of over 280 free legal advice clinics that provide initial advice to individuals on various areas of law. Use their search option to see if there is a clinic near you that offers family law advice. Another option might be a law centre where lawyers sometimes give free legal advice on family law issues. Use the Law Centres Network search option to see if there is a law centre near you.

For help finding a family lawyer a good place to start is Resolution where you can find lawyers by searching using your postcode. Resolution members must commit to helping you work out your legal problem in a non-confrontational way. A green tick next to the lawyer’s name tells you that they offer legal aid. You can find an accredited lawyer who is a specialist in finances on divorce by going to the ‘Find a law professional’ page. Then, click on ‘advanced search’.  Click on Type of Resolution accreditation’ and choose ‘Complex lower income financial remedies’ and ‘Pensions’.

You can also search for a specialist lawyer near you who has been accredited by the Law Society. This means they have a significant amount of experience and expertise and have passed a Law Society assessment. On the Law Society Find a solicitor page you can click on ‘More search options’ on the right at the bottom of the box. This gives more options to choose from. Here you can tick the accreditation box for ‘Family’ or ‘Family - advanced’, or both. You can also find a family lawyer via the GOV.UK website by searching online for 'find a legal aid adviser or family mediator'.

Some family law specialists do extra training in an approach to solving legal problems called the collaborative approach. If you use this approach, each of you agree to use a collaboratively trained lawyer and have meetings together to try and solve the issues without going to court. You can search for a collaboratively trained lawyer on the Resolution website by choosing ‘Collaborative practitioner’ in the Service offering box.

For help finding a Pensions on Divorce Expert (or PODE) a good place to start is the Resolution website. Search for a ‘financial professional’ in the section called ‘service offering’ on the Find a law professional page. Then use an online search engine to learn more about what the professionals you have found on the Resolution website offer as part of their service.

To find a good family mediator it is a good idea to check any recommendations using the family mediator finder service on the Family Mediation Council website. Choosing a mediator from the Family Mediation Council register guarantees that the mediator is properly trained, fully insured and has a complaints process if something goes wrong.  It is fine to phone around, ask how much they charge and compare prices. For more useful information on mediation as a process have a look at A survival guide to family mediation.

If you and your ex decide that you want to involve an arbitrator to decide parts of the case that you cannot agree on, you can get help finding an arbitrator on the Institute of Family Law Arbitrators website.

If your case ends up in court a good place to start looking for more information is our Going to the family court page. This brings together all our resources and has information on where to go for practical help, legal advice and representation at court. If you end up going to court without a lawyer we have a guide that you may find useful - A survival guide to going to court when the other side has a lawyer and you don’t. We also have a film to help you prepare - Representing yourself in the family court.

If your ex has been or is being abusive to you there are lots of places you can find out more information and get support. Always dial 999 in an emergency. For support or to discuss your options you can call the National Domestic Violence Helpline on 0808 2000 247 or in Wales, Live Fear Free on 0808 80 10 800.

Both helplines are for anyone who is experiencing, or has experienced domestic abuse, or for anyone who is worried about domestic abuse happening to a friend, family member or colleague. It is free, confidential and the number will not show up on a BT telephone bill.

If you are a man and you or your children are affected by domestic violence or abuse you can contact the Men’s Advice Line on 0808 801 0327.

Galop runs a national helpline for lesbian, gay, bisexual and trans people experiencing domestic abuse. You can contact them on 0800 999 5428.

You can find more information and support from:

• Refuge
• Women’s Aid
• Welsh Women’s Aid
• Surviving Economic Abuse

Accrual rate - this is the proportion of your salary you’ll get as an annual retirement income, and is set by your employer. The accrual rate is usually written as a fraction of your pensionable pay. So for example, if the accrual rate is 1/80th, you will get 1/80th of your pensionable pay as a pension for each year that you have worked.

Actuary - there are different types of actuaries. Actuaries that specialise in pensions use their mathematical skills to work out what benefits a pension has and what that will mean in years to come for you in terms of your income and other financial benefits. If they specialise in pensions on divorce then they can also advise on what the different options for dealing with pensions would mean for you and your ex.

Additional State Pension - this is part of the pension provided by the government to people who reached state retirement age on or before 6th April 2016. Not everyone gets this - it depends on the type of pension arrangements you had over your working lifetime and if you were employed (self-employed people were not entitled to this pension).

Annuity - this is a pension plan that provides a regular income in retirement. This regular income can be for the rest of your life or for a set number of years. The amount you get is set in advance and can either remain level or increase in a number of different ways.

Basic State Pension - this is the pension provided by the government to people reaching State Pension retirement age on or before 6th April 2016. The amount you get is based on your National Insurance contributions made before 6th April 2016.

Cash equivalent (CE) - this is sometimes also called the cash equivalent transfer value (CETV) or the cash equivalent value (CEV). This is the capital value given to your pension pot by your pension provider. Be aware that it does not give you any idea as to the other benefits that may come with the pension and which could in reality make your or your ex’s pension much more valuable in retirement.

Defined benefit pension - defined benefit pensions are workplace pensions, run by your employer. These pension plans are sometimes called ‘final salary’ or ‘salary-related’ pensions, but there are other types too. The value is based on how long you’ve worked for your employer and your salary. The amount you will get on retirement is set or ‘defined’ by the rules of the particular scheme. Public sector and uniformed services pensions are defined benefit pensions.  

Defined contribution pension - These are the most common type of private pension. The pension pot is based on how much is paid in, how long it has been invested for and how well the investments perform. What you get when you retire is not set in advance.

Financial order - a ‘financial order’ or 'financial remedy order' is what the law calls a court order that sets out how the finances you both have should be sorted out either during the divorce or when your divorce is finalised.

Financial planner / financial adviser - this is someone who can help you by advising you widely about all of your financial needs.

Guaranteed Annuity Rate (GAR) - older private pensions (typically before 1990) sometimes came with a promised or ‘guaranteed’ rate of income that you would get on retirement. This is usually a very valuable benefit to have.

Independent financial adviser (IFA) - this is a financial adviser who works independently and so can advise you on all the different financial products or options available rather than just the ones from certain providers.

New State Pension - the pension you get from the government if you reached State Pension age on or after 6th April 2016. The amount you get depends on your National Insurance contributions.

Offsetting - this can happen when a couple are sorting out their finances on divorce. It is the word used to explain the approach where one person gives up their right to a future income from a pension in exchange for current capital, often the family home.

Pension attachment order - this is an order that the court can make when a couple divorce, where a percentage of your pension lump sum, death in service benefits or income is paid to your ex when you retire. Or if you have the benefit of this kind of order, a percentage of your ex’s pension will be paid to you, when your ex retires.

Pension credit - if you benefit from a pension sharing order, this is the money or capital that gets taken from your ex’s pension and put in a pension for you.

Pension debit - if your ex benefits from a pension sharing order, this is the money or capital that gets taken from your pension and goes into a pension for your ex.

Pension freedoms - these rules enable people to access some of their defined contribution pension pot in cash from the age of 55 if they want to, rather than waiting till they get older and have it as an income. On 6th April 2028 the earliest age you can do this at will go up to 57. This change applies to people who were born after 6th April 1973.

Pensions on Divorce Expert (PODE) - a Pensions on Divorce Expert can examine the pensions you both have and report on what their values are and whether it is appropriate to compare the various values with each other on a like-for-like basis. These people include financial advisers, financial planners and actuaries. But they are only Pensions on Divorce Experts as well if they are experienced in the area of pensions on divorce. There is no specific qualification that someone can get to become a Pensions on Divorce Expert. So, lots of experience of this type of work is key.

Pension sharing order - this is an order that the court can make when a couple divorce, which shares out your pension savings between you. A pension sharing order tells the providers of a pension fund to transfer a percentage of the cash equivalent (anything up to 100%) to whichever one of you is to benefit from the order.

Protected Payment - this is in addition to the new State Pension, for people reaching State Pension age on or after 6th April 2016. You are only entitled to it if you had a significant Additional State Pension before 6th April 2016. A calculation was used to work out how much you could carry over into the new system. That amount is then ‘protected’.

Substitution - if you reached State Pension Age before on or before 5th April 2016 and your ex had better National Insurance contributions than you (perhaps because you didn’t work outside of the home for many years) you can apply to substitute your ex’s record for your own, if their record is higher. This can increase your basic State Pension payments without reducing your ex’s.

Undertaking - this is a formal promise to the court which can be enforced like a court order. A person who breaches an undertaking can be found to be in contempt of court and punished with a fine or a prison sentence or both.

We talk about pensions basics in this guide. These tables give you an overview and some more types of pensions that you or your ex may have so that you can work out where your pension fits when it comes to valuing the ‘pension pot’.

Look at your pension paperwork and use the table to help you work out whether your pension is a defined contribution or defined benefit pension. Don’t be afraid to call your pension provider and ask them if you are not sure.

If you can’t see pensions listed here that you need to take into account in your divorce you can find more helpful information on the MoneyHelper website.

State pensions
See the section called Stage 1 for a reminder on how to find out which of these you have and how to get valuations. 

Private pensions
See section called Stage 1 for a reminder on how to find out what pensions you have and how to get valuations.

Disclaimer

The information in this guide applies to the law in England and Wales only. The information in this guide is correct at the date of publication. The law is complicated and does change. We have simplified things in this guide. Please don’t rely on this guide as a complete statement of the law. We recommend you try and get advice from the sources we have suggested.

The cases we refer to are not always real but show a typical situation. We have included them to help you think about how to deal with your own situation.

Acknowledgements

This guide was updated by Advicenow in collaboration with the Pension Advisory Group

and the University of Bristol School of Law, thanks to funding from the Nuffield Foundation.

The Nuffield Foundation is an independent charitable trust with a mission to improve social well-being. The Nuffield Foundation has funded this project, but the views are those of Law for Life and not those of the Nuffield Foundation.

Law for Life would like to thank the Family Justice Council for their involvement and support in the update of this guide.

Law for Life would like to thank all those who provided advice and feedback on this guide, particularly members and associates of the Pension Advisory Group including Paul Cobley, Rhys Taylor, Hilary Woodward, Fiona Tait and Bryan Scant.

This guide is endorsed by the President of the Family Division, Sir Andrew McFarlane, and by the Family Justice Council.

January 2021

This guide was written and produced by Advicenow in collaboration with the Pension Advisory Group and the University of Cambridge Faculty of Law, with funding from the Nuffield Foundation.

The Nuffield Foundation is an independent charitable trust with a mission to improve social well-being. The Nuffield Foundation has funded this project but the views are those of Advicenow and not those of the Nuffield Foundation.

Advicenow would like to thank the Family Justice Council for their involvement and support in the production of this guide. Advicenow would like to thank all those who provided advice and feedback on this guide, particularly members and associates of the Pension Advisory Group including Paul Cobley, Rhys Taylor and Hilary Woodward. This guide is endorsed by the President of the Family Division, Sir Andrew McFarlane, and by the Family Justice Council.

If you would like this guide in another format please email [email protected]