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When relationships end

Pension sharing

Pension sharing is one of the options available on divorce or the dissolution of a civil partnership. It provides a clean break between parties, as the pension assets are split immediately. This means that each party can decide what to do with their share independently. 

If you decide to opt for pension sharing on your divorce or dissolution of your civil partnership, the Court will issue a pension sharing order (PSO) which states how much of your pension, your ex-spouse or partner is entitled to receive.

The amount is expressed as a percentage of the transfer value(s) of the pension(s) that are to be split, except in Scotland where it can also be expressed as an amount. Similarly, the pension sharing order may also set out how much of your ex-spouse’s or partner’s pension you will receive. Each transfer value is worked out the day before the pension sharing order comes into effect.

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

Your share of your ex-spouse/ partner’s pension: what to do next?

The pension awarded to your ex-spouse or partner (or the pension that you are awarded from your ex-spouse or partner) is called a pension credit, and can be transferred to an existing or new pension scheme that is able to accept the transfer.  It is likely that you will need the help of a regulated financial adviser to arrange a transfer.  To find out more about finding a financial adviser click here.

The pension scheme may insist that your ex-spouse or partner (or you) have to transfer out. In some cases, you may be able to join the original pension scheme but this is not common. The original pension scheme may charge you for the calculation and/or the administration of the sharing order.

 

What about deferred pensions?

If a pension credit you receive remains in the original pension scheme, it will continue to benefit from any increases that the pension scheme gives to deferred pensions. Schemes may charge you and/ or your ex-spouse for the costs of administering the pension sharing arrangement. Pension sharing is also available from schemes where retirement benefits are already being taken, although the process is more complicated and fees charged may be higher

 

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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