Pensions can be one of the most valuable assets in a marriage, yet they are sometimes overlooked when couples separate.
This could become an even more important issue if proposed changes to the law on financial remedies following divorce are introduced.
In June 2026, the Government launched its consultation, A Fairer End to Relationships, which considered reforms to the law governing financial arrangements when marriages and civil partnerships end. The consultation included proposals for a clearer statutory framework dealing with financial remedies, including the treatment of pensions.
The consultation closed on 14 August 2026.
Why are pensions important in divorce?
A pension is not simply a future source of income. Depending on the type of pension and the length of the marriage, it can represent a substantial asset.
This can be particularly important where one spouse has built up a significant pension while the other has taken time out of paid employment to care for children.
The result can be an apparent imbalance: one spouse may have substantial pension provision for retirement while the other has little or none.
This is one reason why looking only at the family home and savings can give an incomplete picture of a couple’s financial position.
What happens to pensions when you divorce?
There are several ways pensions can be taken into account as part of a financial settlement.
A pension sharing order can transfer a percentage of one spouse’s pension to the other, creating a pension in the recipient’s name.
Alternatively, the value of a pension may be taken into account when dividing other assets. This is sometimes referred to as pension offsetting. For example, one spouse may retain a greater share of the family home while the other retains a greater share of the pension.
Which approach is appropriate depends on the circumstances and the couple’s overall financial position.
What could change?
The Government’s consultation proposes a more structured approach to financial remedies, including greater clarity around the treatment of assets and needs.
The proposals would place children’s needs first, followed by consideration of the couple’s capital, income, housing and pension needs.
The proposals do not mean that pensions would simply be divided 50/50 in every divorce. Financial settlements would still need to take account of the circumstances of each family and the parties’ needs.
It is also important to remember that these are proposals, not changes that have already become law.
Why should pensions be considered early?
Pensions can be complicated. Their value shown on a pension statement may not represent the amount that would be needed to provide an equivalent retirement income, and different types of pension can require different considerations.
In most cases, a specialist pension report may therefore be appropriate before a settlement is reached – especially where public sector pensions are involved.
Obtaining information about pensions at an early stage can help ensure that their value and importance are properly understood when negotiating a financial settlement.
What should you do if you are divorcing?
If you are dealing with financial matters following divorce, it is important to consider all of the family’s assets and liabilities, rather than focusing solely on the family home.
Pensions should form part of that overall assessment where appropriate.
At E J Coombs Solicitors, we can advise you about financial settlements on divorce, including the treatment of pensions and whether a pension sharing order or another approach may be appropriate.
