Chester 01244 405555

Grosvenor Court
Foregate Street Chester
Cheshire CH1 1HG
DX: 19990 Chester

Shrewsbury 01743 443 043

Lakeside House
Oxon Business Park
Shrewsbury SY3 5HJ
DX: 148563 Shrewsbury 14

Airport City, Manchester 0844 800 8346

Office 129
Manchester Business Park
3000 Aviator Way
Manchester M22 5TG

Send us a message
Our Offices

Avoiding pension pitfalls during divorce

6th November, 2019

One of the most complicated and confusing aspects when trying to divide the finances during divorce is how to treat and share pensions.

Historically clients, practitioners and the Courts have struggled with the division of pension assets, which can often be of significant value, due to complicated structures, a lack of knowledge and a failure to get expert guidance.  The lack of uniformity in how the Courts approached pension sharing further exacerbated the scattergun approach to the making of orders.

The greatest concern was that due to the Court not dealing appropriately with the division of pensions, and in some cases ignoring them altogether, it was mostly women who were disadvantaged in receiving an adequate pension entitlement following divorce.

In 2017 the independent Pension Advisory Group was set up and the Group published its report in July 2019. The recommendation from the report is that ignoring pensions, or even agreeing to ignore the pensions, is not an option.

Pensions must form part of an overall settlement and provision has to be made for both parties’ retirement, unless there is a clear (and well understood) financial advantage to ‘offset’ the pension claims against other assets.  The report asserts that legal professionals and their clients should not assume that just because a pension has been valued, then it is a straightforward exercise in then dividing the pension pot.

A pension ‘cash equivalent’ (CE) value is often insufficient as it does not always take into consideration the benefits that lay behind the headline CE value.

The approach previously taken by pension actuaries were only required in cases where the pension values were high, or there was a number of different pension funds is no longer good practice.  An actuarial report it now going to be required in the majority of cases to assist with the division of the pension assets or to safely offset against non-pension assets.

As always, specialist legal advice should always be taken.  However, it is equally important to take independent financial advice too, so that clients can see what their post-retirement futures may look like.

For further advice regarding divorce, contact Simon Mawdsley, Family Law Senior Associate.

Simon Mawdsley


Senior Associate
Email: [email protected]
Tel: 01244 405 415

You might also be interested in...

Villiers v Villiers (2018) EWCA Civ 1120

3rd July, 2020

Brief Background Mr & Mrs Villier married in 1995, and lived in Scotland together until separation in 2012. Once separated, the wife moved to England, but the husband remained living in Scotland. In July 2013 the wife issued a divorce petition in England, but in October 2014 the husband lodged a writ for divorce in Scotland. As the... Read More »

Why claiming inheritance tax relief is not simply horseplay

1st July, 2020

Agricultural property relief from Inheritance Tax has long been a valuable relief for estates, which when available can... Read More »

Governments Calls For Responsible Contractual Behaviour – What Does This Mean For You?

29th June, 2020

In May 2020 the UK Government released additional guidance in connection with the Covid-19 pandemic, this time in... Read More »

Contact Us
Secured By miniOrange