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When relationships end

Pension offsetting

Pension offsetting is one of the options available on divorce or the dissolution of a civil partnership. It provides a clean break between all parties, as assets of the same or similar value are allocated to your ex-spouse or civil partner, and your pension remains with you. This may be an appropriate option if there are overseas pension assets that need to be split, as these cannot be shared via a UK court order.

On your divorce or dissolution of your civil partnership, all of your assets and those of your ex-spouse or partner are taken into account. If you decide to opt for pension offsetting, each party retains their pension assets, but these are then offset against the other assets – for example, if one person has a large pension pot, the other may receive the house (assuming it has a similar value).

As it can be hard to value some assets and as their values may change at different rates, it can be hard to fairly split assets using pension offsetting, especially as the value of a person’s pension schemes may, in the long run, be their most valuable asset.

In situations where there may not be many assets or assets have high values, pension sharing and pension earmarking may be used rather than pension offsetting.

If you’re thinking about choosing a pension offsetting, but would like some more guidance about this and other options mentioned above, our team is here to help. You can find out more about our services and what we can offer those thinking of going through a divorce or dissolution here

Frequently asked...

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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