Money can be a battleground when it comes to divorce and there is one asset which can get overlooked
Separating couples are being urged not to discount a major asset that is often overlooked. It is estimated that more than two in five marriages will end up in divorce in the United Kingdom.
Figures show that in the first six months of 2025 there were nearly 38,000 divorces recorded with one in three of these being as a result of adultery and a quarter because couples have grown apart. However many of these are not amicable and can lead to battles over finances.
But while some people are keen to move on experts are warning it is essential not to overlook a key asset that is often missed when couples divorce. And it could mean a better retirement, especially for women who may have given up years of work to have children and then bring them up.
According to Andrew Foulds, Senior Associate Solicitor in the Family team at Blacks Solicitors, pensions are an asset to be considered when dividing the finances at the end of a relationship. He explains: “Putting in place and organising pensions is something often overlooked in the divorce process, even though they are usually a considerably valuable asset.
“Any pension built up during the marriage (typically from when you started living together to separation) is usually treated as shared, no matter whose name it is in. In some cases, the court may also consider pensions built up prior to the marriage.”
He added: “Pensions can be divided through a Pension Sharing Order (PSO), which can only be made after a divorce and a financial order. This allows some or all of one person’s pension to be transferred to the other.
“Courts often rely on specialist pension experts to help decide what is fair. Only married couples can apply for a PSO- cohabiting partners do not have this right.” For more information and Family law advice, please visit: www.lawblacks.com
What is the law
According to the government-back impartial advice site Moneyhelper, private pensions usually count as part of the money and property you own with your ex-partner. This means they need to be considered when deciding how to settle your finances.
To find out how much your pension is worth, ask each pension scheme for a ‘cash equivalent transfer value’ for divorce or dissolution purposes. You might have to pay a fee and wait up to three months to receive it. You can then add the value of your pensions to any other assets you own, like a house.
How are pensions split in a divorce?
You’ll normally need to decide how your pensions are split between you – they don’t always need to be shared equally. If you live in Scotland, only pensions built up during your marriage or civil partnership matter.
There are three options for splitting pensions:
- Pension sharing – where all or part of a pension is transferred to an ex-partner. As you each own a separate part of the pension, you get a clean break from each other.
- Pension attachment or earmarking – where the pension stays in the same name, but the ex-partner will get a share when it pays out. The partner who owns the pension will usually decide when it will start paying out, so this option does not offer a clean break from each other.
- Pension offsetting – where you keep each pension in full so you get a clean break, but divide your other money and property differently. For example, if you keep a large pension pot, your ex-partner might keep your house if it’s a similar value.
The basic State Pension is separate to this and cannot be shared. But you might have to consider splitting any Additional State Pension built up before April 2016 or protected payments.
If you can reach an agreement, you usually need a court to approve it before it’s legally binding. If you cannot agree, or it’s not safe for you to deal with your ex-partner directly, you can ask a court to decide how your pensions should be split. The court will usually review your finances and tell you what they believe is fair.
