There are many types of pensions, state pensions, pensions paid by employees and their employers, and personal pensions. To put simply, a pension is a sum of money that can be used as a retirement fund in the future. During a divorce, the judge may deem it necessary to make a pension sharing order so that this pot of money is split between you and your ex-spouse.

As a marital asset, a pension can be considered within the financial settlement in order to ensure a fair agreement is reached by both parties. If you are going through a divorce or separation, it’s important to protect your pension so that you don’t lose the funds you have worked so hard to save. This can be done through a number of different approaches, for example, pension offsetting and negotiation.

Why do you need to protect your pension during a divorce?
A pension is often one of the most valuable assets a couple possesses during a divorce. It provides you with a stable income that will support you after retirement. Because of this, how it is protected and managed throughout the division of finances is incredibly important.

Unfortunately, because the pension is so valuable, if you don’t have a financial settlement order, your ex-partner may be able to make a financial claim for your pension. This can be done during your divorce or years later.

Can my spouse take half my pension during a divorce settlement?
During a divorce settlement, there is often a misconception that all assets will be split 50/50, however this is not the case. The court will attempt to achieve a fair division of finances by considering factors like the income of the couple, daily expenses, needs of both parties, and the requirements of any children involved.

Due to this, pensions are often used to offset the value of other assets. For example, if you wanted to keep your entire pension, your partner may gain a greater share of a different asset.

How can I protect my pension during a divorce?
There are a variety of different ways you can protect your pension if you are going through a divorce or separation. These include but are not limited to:

• Financial settlement orders
• Having a better understanding of your pensions value
• Pension offsetting
• Negotiations
• Pension sharing orders
• Pension attachment orders

Financial settlement orders
A financial settlement can help to secure financial assets like your pension. Both during and for years after a divorce, your ex-spouse may choose to make a claim for your pension. In order to prevent this, you can choose to obtain a financial settlement.

Whether you are close to retiring, or just starting your career, having a financial settlement order that has been approved by the courts can help you to find a solution that is fair for both parties. It will also prevent your ex-partner from being able to make another claim for your pension in the future.

If you are struggling to agree on a financial settlement, an experienced mediator or solicitor can help find an agreement that works for all parties.

Having a better understanding of your pensions value
One of the best ways to protect your pension during a divorce is to understand its value. Many people make the mistake of not fully understanding the value of their pension when dividing financial assets within a divorce.

You may have multiple pensions or a pension which includes valuable assets you would not like to lose.

Consult with a solicitor so that you are fully aware of the value of your pension and any assets within it before you enter into any financial negotiations.

Pension offsetting
Pension offsetting is when you or your ex-spouse takes the pension in exchange for other assets that are equally valuable. This may include things like property or financial investments.

This method can be very beneficial for all those involved and is a great way to protect your pension during a divorce.

However, during this process, it’s important to note that pensions are not considered as valuable as other assets because they can only be accessed when you are 55 years old. Additionally, pensions are taxable when withdrawn, which again decreases their value in relation to other assets like property.

Negotiations
If you are looking to protect your pension, one of your most valuable assets is negotiation. To begin with, all assets being considered during a divorce may be split 50/50. However, this is not necessarily the fair way to divide these assets.

When considering your pension, the court will look at a number of factors. For instance:

• The income of each spouse
• Potential future earnings
• The needs of any children
• Financial needs of each party
• How long the marriage was
• Any additional assets
• Health issues

For instance, an individual who will be taking care of a child full time may be entitled to a larger portion of financial assets like a pension, and this is to ensure that the division is fair. Because of this, having the support of a solicitor can allow you to negotiate and show the court why you should be entitled to more or all of your assets.

Pension sharing orders
When going through a divorce, it can be beneficial to get a pension sharing order to make decisions regarding the division of your pension. This order is issued by the court and can determine how much of a pension you or your ex-spouse are entitled to.

In the event that you are under 55, a deferred pension sharing order will grant you your share of the pension once you reach this age.

These methods can help you to protect your finances and ensure you do not suffer a loss due to your divorce. It is vital that before you handle any of these methods, you consult a divorce solicitor.

Contact us for advice
To get in touch with our divorce solicitors, please call us on 01227 813400 or email canterburycs@boysandmaughan.co.uk for our Canterbury office. If you live on the Isle of Thanet or elsewhere, the best number is 01843 234000 or email family@boysandmaughan.co.uk. Alternatively, you can look up all our divorce specialists and choose who you would like to speak to, or fill in our simple online enquiry form on this page to request a call back.