Pension Sharing On Divorce Explained

If you are divorcing with significant wealth, pensions may be one of the most important parts of the financial settlement. They may also be one of the least straightforward. A pension that looks simple on paper can carry long-term income, tax and liquidity implications that are not immediately clear from its headline value.

This is particularly important if you or your spouse have built up substantial pension benefits through a business, senior executive role, public sector career, professional partnership, SIPP, defined benefit scheme or final salary pension. In these cases, the question is not simply whether a pension should be divided; the more important consideration is how pension sharing fits into the wider settlement and whether another structure, such as offsetting, would produce a better outcome.