A quick guide to pensions and divorce

A quick guide to pensions and divorce

A Quick Guide To Pensions And Divorce

Pensions and Divorce: a quick guide
Aside from a person’s home, generally their biggest financial asset will be their pension so it’s vital that this is not ignored when agreeing a divorce settlement.

Pensions can be dealt with in three ways and we’ll have a look at each one briefly in this article:

  • Off-setting
  • Pension attachment
  • Pension sharing

The Matrimonial Causes Act 1973 dictates how pensions are dealt with on divorce and a solicitor will be able to advise you how it applies to your own situation.

Off-setting:

Off-setting a pension is the traditional approach. It involves arranging martial assets in such a way that the pension remains intact in the hands of one single person. So for example, if they are roughly equal in value, one spouse might keep the matrimonial home and the other keeps 100% of their pension. Each person walks away with an asset of the same value and no money changes hands.

Pension Attachment:

Pension attachment involves part of a person’s pension being ‘ear-marked’ for someone else when it comes time to pay out the lump sum and income on retirement. In other words, someone’s rights ‘attach’ to another person’s pension. Up to 100% of a pension can be attached in favour of someone else. Pension attachment is not very popular in practice because the person benefiting from an attachment order has no control over the pension. The pension-holder could vary how much they pay in each month, or stop payments altogether if they lose their job, or could retire early thereby limiting the amount available for attachment.

Pension Sharing:

Pension Sharing is exactly what it sounds like! The pension is physically divided up into two pensions upon divorce and the parties and they can re-invest as they wish (as far as is allowed by the rules of each pension scheme) – this offers a divorcing spouse a higher degree of control over their future income.

Valuing the pension

Unless the pension is already being paid out to the pension-holder it is a ‘future asset’ and therefore difficult to value accurately. The court will use the Cash Equivalent Transfer Value, or CETV, as the best estimate of the value of the pension on any given date. The pension provider will be able to provide the CETV.

You should note that solicitors cannot give investment advice. They can advise you how best to deal with a pension in a divorce settlement but not what to do with any money you receive as part of a settlement. Your solicitor should be able to refer you to a reputable Independent Financial Adviser who can help you choose the best investments.

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At Grayfords, we understand the importance of developing effective strategies to achieve the desired outcomes for our clients in family law and private client law matters. That's why we prioritise regular catch-up strategies to ensure that your case is handled efficiently and aligned with your goals. 

As experienced family and private client lawyers, and strategy experts, we recognise that every case is unique and requires a tailored approach. Through regular catch-up sessions, we engage in open and collaborative discussions with our clients to gain a thorough understanding of their objectives, concerns, and preferences. These ‘catch-ups’ allow us to assess the progress of your case, identify any evolving needs or challenges, and adjust our strategies accordingly. We are also then able to put in place any personal support our clients may need should they wish to avail themselves of our coaching and therapy & mental health services at any point during their legal matter.

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At Grayfords, we believe in the power of strategic partnerships to enhance the quality and efficiency of our legal services. We understand that legal matters often require expertise in various specialised areas, and that's why we have established strong relationships with trusted and renowned specialists in both family law, private client law, and therapy and mental health support.

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Time for you


At Grayfords, we understand the value of time, and we prioritise our clients by ensuring that they receive the attention and support they need throughout their legal journey. Unlike other family law and firms, we never claim to be too busy for our clients. We believe that effective communication is essential, and our team is always accessible and responsive to your needs.

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At Grayfords, we offer a specialised range of services across both family law and private client law, tailored to meet the unique needs of our clients. With a focus on honesty, empathy, and pragmatism, we provide reliable legal advice that is designed to help our clients achieve success in their legal matters. 

In the realm of family law, we understand the emotional challenges that can arise during sensitive family disputes. Our team of experienced family law solicitors provides compassionate support and guidance throughout the process. Whether you are going through a divorce, child custody battle, or dealing with complex property division, we have the expertise to navigate these intricate matters while prioritising your best interests. 

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