Pension offsetting in divorce
What is pension offsetting?
Pensions are shared according to the terms of your divorce. But one of the ways a pension can be split is through pension offsetting.
This is when you or your ex-partner gets a share of another asset, rather than the other person's pension.
For example:
The court has decided to split all of your combined assets 50/50. You have a pension but your ex-partner does not. The pension fund is worth £150,000 and your family home is worth £300,000. The court decides that you can keep your pension arrangement but your ex-partner is then entitled to £225,000 of the house proceeds.
| Benefits of pension offsetting | Drawbacks of pension offsetting |
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Other ways to divide your pensions
Pension attachment/ earmarking order
A proportion of the pensions are paid directly to you or your ex-partner when the benefit pays out.
Pension sharing
A share of the pensions is transferred to you or your ex-partner.
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.