By Leah Caldwell & Georgina Robson | Finance & Property | May 2026

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What happens to my pension when I get divorced?
Part 1: Legal and practical considerations

Introduction

In the past it was not uncommon for pensions to be overlooked in a financial settlement. The subject of pensions can be complicated (both technically and emotionally), and it can be tempting (for clients, mediators and legal professionals alike) to sideline these conversations and give them only cursory attention. In recent years, however, the work of the Pensions Advisory Group has developed guidance on best practice when dealing with pensions on divorce and, as they identify, ‘Ignoring the pensions or agreeing to ignore the pensions is not an option’, A Guide to the Treatment of Pensions on Divorce (second edition) page 2. Consequently, it is recognised that detailed, and often expert, consideration may need to be given to pensions when navigating a financial settlement.

In this two-part blog, we will address the legal position in relation to pensions on divorce (part 1) and explain how these issues should be properly dealt with within a mediation process (part 2).

Pensions – an ‘unrealisable asset’

It is not uncommon for people to view pensions slightly differently to their other financial assets. This is because, typically, a person cannot access pensions immediately and instead will have to wait until a future date until they benefit from them. Consequently, pensions are unlikely to provide the solution to a person’s immediate financial and housing needs.

Pensions are therefore described as ‘non-realisable’ assets (i.e., distinguishing them from property and cash that is immediately available or ‘realisable’). However, whilst the label of ‘non-realisable asset’ distinguishes pensions as being a separate sub-set of assets, they are assets nonetheless and often one of the most valuable elements within a financial settlement.

The law in relation to pensions

It is also not uncommon for people to perceive a pension as being ‘theirs’. However, as with other assets in a divorce, courts have the power to redistribute pensions to achieve a fair outcome and will consider various factors (as set out in section 25 of the Matrimonial Causes Act 1973). In many cases, the needs of the family (to include any children of the family who are 18 or less and both spouses) are a primary consideration, and a court will be concerned to find outcomes to ensure that everyone is housed, and that both parties have sufficient income to meet their current and future financial needs.

What orders can a court make in relation to pensions

As with income and realisable assets, a judge has the power to redistribute pensions. This is done via the following means:

1. Pension Sharing Order

   A pension sharing order directs that a percentage of the value of a person’s pension is transferred over to a new pension scheme in the other person’s name. Unlike attachment orders (see below), this creates a new pension, and the recipient of this new pension has complete control over it (e.g., when and how it is accessed).

   Pension sharing can only be actioned where it is ordered by the court (either as part of contested court proceedings or a consent order).

   Whilst pension sharing may sound relatively straightforward, various factors may mean that this is not the case including (but not limited to):

   • The type of pension involved
   • The means of valuing the pension
   • How people intend to use their pensions – do they want to use them to withdraw lump sum(s) or maximise future income?
   • Whether people are looking to have an equal share of the capital value of the pension or an equal income from the pension
   • Whether a pension is already in payment
   • The pension provider’s fees for enacting a pension share and how these are paid



2. Attachment Order (also known as ‘pension ear-marking’)

   Attachments orders are another way a judge can share pensions. An attachment order provides that when the original pension-holder accesses their pension (as a regular income or lump sum) a percentage is diverted to their ex. The downside of this is that the recipient of the attachment order does not have control over when and how they receive money from the pension. Further, if the original pension-holder dies, any pension payments to the recipient end. For these reasons, pension attachment orders are now largely obsolete.



3. Pension off-setting

   Pension-offsetting involves pensions being left where they are and, in lieu of this, the spouse that would otherwise be looking for a pension share receiving a larger percentage of other assets within the divorce settlement (e.g., a greater percentage of the equity in a property).

   Pension off-setting can be a helpful outcome where one person wants to retain their pension (e.g., because their priority is their future financial security), whereas the other person requires a greater share of the realisable assets (e.g., to enable them to purchase a property). You do not need a court order to off-set pensions.

   The difficulty with off-setting is that pensions and realisable assets are not like-for-like. Consequently, off-setting is often seen as an art rather than an exact science and research has identified the potential for off-sets to create unfair outcomes.

Proper consideration of pensions is an essential part of reaching a fair financial settlement. Whilst mediation is a quicker, less expensive and more efficient process, this does not mean that we cut corners in relation to pensions. Our mediators are experienced in working alongside Pensions on Divorce Experts (see part 2 of this blog for more information) to help clients reach equitable outcomes. To find out more contact Mediation First to see how we can help you reach a mutually acceptable agreement.