What is a Pension Sharing Order?

Pension sharing orders are legally binding documents issued by the courts which determine exactly how your pensions are split after a divorce or civil partnership dissolution. They can provide some peace of mind about what will happen to your pensions after you divorce, so that you don’t run into financial complications later down the line.

Because pensions are considered as assets, they have to be included when calculating your total worth when going through a divorce in the UK. Any savings and property you and your partner own individually or separately will also be considered. Whilst divorce negotiations are underway, you must obtain a valuation of your partner’s pension, but it can’t be from over 12 months ago.

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How are Pension Shares Calculated?

When the value of each of your pension funds is calculated, all funds are considered. This means that even if your pension was built up before the beginning of your marriage or civil partnership, those funds will be included in pension share calculations.

The exact percentage of the transfer value of pension that you or your ex-spouse are entitled to is decided by the court. They base this percentage on the value of the pension the day before the order comes into effect.

If you need to obtain a pension sharing order, you have to involve the court. You can’t go through your pension provider to get your pension transferred or divided without getting a court order first.

This doesn’t necessarily mean that you and your ex-partner will argue though. Often couples can come to good and fair agreements in court, which benefit both parties.


When will the Order come into Effect?

Even if you and your spouse have already calculated and agreed on the pension sharing order, it won’t actually be final until the decree absolute or dissolution is granted, which is the finalisation of your divorce or end of your civil partnership.

After receiving confirmation that the divorce is complete, whatever pension provider holds the funds has four months to transfer them into the correct account.


Who can get a Pension Sharing Order?

If you are divorcing or dissolving a civil partnership, you will be able to obtain a pension sharing order. If you are separating from you cohabiting relationship but are not married or in a civil partnership, then unfortunately you can’t get a pension sharing order, no matter how long you have been together.

If you are eligible, you don’t have to use the same pension scheme as your ex-partner in order to receive a share of their pension. If you do, then it will be classed as an ‘internal transfer’, but if you don’t it will simply be classed as an ‘external transfer’. It seems complicated, but actually it’s usually fairly straightforward. As long as you have a well-trained family law solicitor by your side, you’ll achieve a clean-break divorce or dissolution.


Why you Should get a Pension Sharing Order

People tend to overlook their pension when they’re getting divorced, however it is actually a very important asset like a car or a house. If you fail to properly take into account your pension when you divorce or end a civil partnership, you risk one of you coming away from the divorce worse off than your ex-partner for no fair reason.

Pension sharing isn’t compulsory, but it’s definitely advisable for your peace of mind.

If you require assistance with pension sharing orders, AWH Solicitors in Manchester will advise and guide you through the process, making it as smooth and successful as possible for both parties.