Pension sharing orders in divorce
What is a pension sharing order?
Pensions are shared according to the terms of your divorce. But one of the ways a pension can be split is through a pension sharing order.
A pension sharing order is when your pension entitlements are separated by the courts (or by Minutes in Scotland), so you can each run your own pensions independently of each other, giving you a clean break.
However as the courts aim for an equal split of assets in divorce proceedings, they may decide to give some of your pension to your ex-partner, or vice versa, so each of you has an equal share.
The amount given is called a pension debit and the amount received is a pension credit. In England and Wales, the amount is expressed as a percentage of the cash equivalent transfer value (CETV) of the pensions, whereas in Scotland it can also be shown as a monetary amount. This is important as the value of the pension may change between the date of the separation and when the pension debit starts.
If you're receiving the pension credit you will need to have a pension scheme that accepts these transfers or if possible, join the original pension scheme.
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Pension sharing order FAQs
Other ways to divide your pensions
Offsetting
You or your ex-partner gets a share of another asset, rather than the actual pensions.
Pension attachment/ earmarking order
A proportion of the pensions are paid directly to you or your ex-partner when the benefit pays out.
Important information: This is for information purposes only and the views contained are not to be taken as advice or a recommendation for any product, service or course of action. If you need advice about how any of this information applies to you personally, you should contact an authorised financial adviser. Tax treatment depends on individual circumstances and all pension and tax rules may change in the future. You cannot normally access your pension savings until age 55. This is due rise to 57 in 2028.