A guide to divorce and pension sharing

Posted on October 20, 2025

When going through a divorce or civil partnership dissolution, dividing assets is often one of the most difficult aspects and whilst the family home usually gets a lot of attention, pensions should not be overlooked.

Divorce and finances family law solicitor, Lucinda McWatt, looks at how the law provides a way to divide pensions fairly between separating couples through something called pension sharing.

What is a pension sharing order?

Pension sharing is a legal process introduced in 2000 allowing pensions to be divided as part of a divorce settlement.

“This is one area of divorce and finances that can take people by surprise as pensions can often have a significant value, sometimes more than the family home and sometimes pension pots become personal after clients have paid in to it for years,” says Lucinda McWatt.

“The court can issue a Pension Sharing Order (PSO), which transfers a percentage of one spouse’s pension to the other. This is known as a pension credit, which becomes a separate pension pot in the recipient’s name. The big advantage is that it gives both parties financial independence and a “clean break” when it comes to retirement savings,” she adds.

How does a pension sharing order work?

Pension values are obtained by the parties (workplace, private, or public sector).
Expert advice is often sought from a Pension on Divorce Expert regarding how to share equally in the pension funds to provide equal income or capital pots in retirement. Often advice is sought around offsetting i.e. if one person wishes to retain more of the pension what should the other person retain in capital (money) in consideration of that.
Either by agreement or of the Courts own volition a Pension Sharing Order can be made.
The share is stated as a percentage of the pension, not a fixed amount.
Once the order is implemented, the recipient’s share becomes their own pension fund.
This means that both parties can move forward independently, without being tied to each other’s future pension income.

Many people underestimate the value of pensions when negotiating a financial settlement. However, failing to address pensions can result in one spouse being left without proper retirement provision.

“Pension sharing ensures fairness, a clean break and security, however it can be a complex area of the split to manage and it’s something in which we have vast experience,” advises Lucinda.

“It’s also worth noting that we can also refer you to our inhouse financial advisers who can best advise what to do with the pension once you have received it”

Alternatives to a pension sharing order

While pension sharing orders are common, the court may also consider:

Pension offsetting – one spouse keeps the pension, while the other receives a larger share of different assets (e.g. the family home).
Pension attachment (earmarking) – part of a pension is paid to the ex-spouse when it is drawn, but this does not provide a clean break.

Each option has pros and cons, which is why legal and financial advice is essential.

“A Pension Sharing Order can only be made by the court and so without expert advice from a family and divorce solicitor it’s easy to underestimate the importance of pensions or agree to an unfair settlement,” she adds.

Pension sharing FAQs

Do I have to share my pension in divorce?

Not always. Whether pensions are shared depends on the overall financial settlement. However, pensions must be considered by the court, even if one party ends up keeping their pension in exchange for other assets.

How much of my pension will my ex get?

This depends on factors such as the length of the marriage, each person’s needs, and the value of other assets. The court will decide on a fair percentage, not a fixed sum.

Can we agree on pension sharing without going to court?

You and your ex can reach an agreement, but it must be approved by the court in a Consent Order for it to be legally binding. To share a pension you must have a Court Order.

What types of pensions can be shared in divorce?

Most workplace and private pensions can be shared. The State Basic Pension cannot be shared, but certain additional State Pension rights may be included.

How can we help?

For legal advice on pensions, finances and divorce contact our family law solicitors on 0161 785 3500 or email enquiries@pearsonlegal.co.uk

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.