Fact Sheet - Pension Sharing – Machins Solicitors LLP

Q – I am 58 years facing a divorce and I am told my spouse can make a claim against my pension. Is this true?

A – Yes. There is an Act of Parliament called the Welfare Reform & Pension Act 1999 which says pensions can be shared.

Q – But that’s not fair.

A – Pensions are now seen as family assets rather than the property of one party. Your spouses input may have been as a home maker rather than a bread winner but could you have worked if that had not been the case?

Q – How much will I have to pay?

A –The pension fund will be shared in an appropriate way and your spouse will take a share of the income when they reach the pensionable age that is permitted by the Rules that govern your scheme. They may stay in your pension scheme if this is permitted or take the value of the share for investment elsewhere.

Q – I’m eight years older. Do you mean that I cannot get my entire pension until they reach pensionable age?

A – No. The share is made following an order of the Court and the granting of Decree Absolute and separate pension schemes will be created.

Q – How is it worked out?

A – You have to find out how much capital is in your pension fund and if they have a fund of their own. As a starting point, they are added together and the total divided with any amount in their pension then being deducted. The balance from your scheme is expressed as a percentage of your fund and that is then transferred to your spouse. However, because the life expectancy of a woman is longer than a man there may need to be an actuarial calculation to equalise the income each of you can take from the pensions, which will establish the precise percentage.

Q – Things get worse and worse.

A – Not really. The pension share gives your spouse an income on retirement so you probably wont have to pay maintenance thereafter and nor will you have to worry about ensuring that they have a cash lump sum to keep going if you predecease them. Usually both of you will be able to take 25% of the capital allocated to you as a tax free lump sum. The pension fund will take the strain.

Fact Sheet – Pension Sharing

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