Why pension pots should be considered alongside property in a divorce

Posted on November 6, 2026

Whilst most couples assume their marital home and bricks and mortar are by far their biggest asset, for many people a pension can represent a substantial source of wealth accumulated during a marriage, but overlooking pensions can have serious consequences when a couple splits.

The financial impact of divorce can continue for many years after the marriage has ended if pension sharing is not part of the overall financial settlement.

Pension wealth gap amongst married couples

According to a survey* there is a continued and significant pension wealth gap amongst married couples. Without the right advice from a divorce solicitor who specialises in finances and who will consider all asset types in the marriage, many women’s financial futures are disadvantaged.

“One of the biggest mistakes you can make during divorce negotiations is concentrating exclusively on the family home and treating pensions as an afterthought,” says Emily Gardner, who works as a trainee solicitor in the family law team at Pearson Solicitors in Oldham.

“If you’ve sacrificed career opportunities or pension contributions while supporting your family, your pension position may be significantly weaker than your former spouse's. A fair financial settlement should take your future, as well as your immediate circumstances, into account,” she adds.

Gender Pension Gap

Career breaks, part-time employment and time spent caring for children can mean that women often have significantly smaller pension provisions than their former husbands. The survey points to men having on average £111,540 in a pension pot, whilst women’s average pension funds are just £43,656 - a difference of 61%.

The research, from the forthcoming 2026 Gender Pensions Gap report, also found that three quarters of divorce settlements (71%) don’t even consider pension assets, these divorces look at property, not pensions and consequently the women who have worked part time during the marriage, are being disadvantaged in the long term.

Pension sharing on divorce

The law does not simply assume that each person should leave the marriage with the pension they have accumulated themselves and pensions should form part of the financial settlement on divorce. With the right legal advice a pension is treated as a valuable matrimonial asset when a couple divorces and the gender gap deficit can be dealt with.

The court has powers to make a pension sharing order, transferring a percentage of one person's pension rights to their former spouse. The recipient receives a pension credit, giving them pension rights in their own name. This can provide a clean break in relation to the pension and is often preferable where the objective is to achieve greater independence between the parties.

“Pension sharing can provide an important way of addressing an imbalance in pension provision between spouses,” adds Emily. “It is not necessarily a 50/50 split, the outcome is specific to the specific circumstances and looks at ages, income, assets, pension provision, future needs and the roles each person has undertaken during the marriage.”

Pension offsetting

In pension offsetting one person retains their pension while the other receives a greater share of another asset, usually the family home. However, these are very different assets, whilst one has capital value, the other provides an income and retirement benefits, so again the right advice is necessary before agreeing to offset a pension against another asset.

“It is important to obtain a complete picture of both parties' pension arrangements before agreeing a financial settlement, they should not be an afterthought.”

“The Pearson family team have active discussions with our clients to consider all aspects of a person’s life when they are considering divorce, often people are unaware of the implications of pensions, savings, investments and other assets, so we help clients understand their financial position and negotiate a settlement to reflect their long term needs,” says Emily.

Pensions can be complicated, particularly where there are several pension schemes, defined benefit pensions, public sector pensions, older schemes or significant differences between the parties' retirement arrangements so the right advice from a specialist family solicitor is necessary.

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

* Survey by Mercer now the Pensions Policy Institute

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.