When there is a divorce or the dissolution of a civil partnership one of the most valuable assets to be considered is the pension rights of one or other of the parties.

There are different types of pension and it will be important to establish basic information and value of pensions in considering a fair division of the assets between spouses or civil partners.

Valuing a pension fund can be difficult and expert advice is often needed to value a pension. The Welfare Reform and Pensions Act 1999 provided that pensions can only be valued by way of a CETV (“cash equivalent transfer value”) This is the amount of money which a pension provider will transfer if the member were to transfer to an alternative scheme. Where the pension is in payment the valuation is the cash equivalent of the benefits (“CEB”)

Once the value and nature of the pension assets have been established there are various orders that the Court can make regarding the pensions to achieve fairness.



The Court can “offset” the value of one parties’ pension asset against another capital asset allowing the party with the pension to keep all or a greater proportion of the pension asset.

When “Offsetting” it should be borne in mind that cash in hand has a greater value than a future income payable over an extended period.

“Offsetting” is only possible where there is spare capital available after re-housing you and your spouse or civil partner.


Pension sharing

Since the Welfare Reform and Pensions Act 1999 came into force on 1st. December 2000 pension funds can be shared between spouses on divorce and since the Civil Partnership Act 2004 on dissolution of a civil partnership.

This means that an existing pension fund can be divided between you and your spouse or civil partner on a percentage basis.

A pension share can be effected by way of an internal or an external transfer. If the transfer is an internal transfer then the recipient of the pension share becomes a member of that pension scheme, with their own fund. Where there is an external transfer the fund received can be invested in a new pension fund of the recipient’s choice.


Pension attachment orders

Pension attachment orders (formerly known as earmarking orders) provide that a percentage of the pension payments and/or lump sum are passed from the pension holder to their spouse or civil partner.

The disadvantage of these orders is that they can be varied and they will cease on the remarriage of the recipient or the death of either the pension holder or the recipient.

A pension attachment order and a pension sharing order cannot both be made in respect of the same pension.

Pensions are a highly complex and almost every case is different. If you would like more information or assistance regarding pensions, please contact our family team to make an appointment. For new clients to the family department we offer a free initial interview.

Please note that the information in this article is not designed to provide legal or other advice or create a solicitor - client relationship. No liability is accepted for any loss caused in reliance upon its content and you should not take or refrain from taking action based upon the same.