Pension Sharing Orders – A Comprehensive Guide

When a marriage breaks down and leads to divorce this can be an extremely stressful time for you and all parties involved.

Navigating the complexities of divorce or the dissolution of a civil partnership can be challenging, especially when it comes to dividing assets. 

One of the most significant yet often overlooked assets is your pension. 

In the UK, a Pension Sharing Order provides a legal framework to ensure that pension benefits are fairly divided between partners.

This guide aims to go into detail about Pension Sharing Orders, explaining what they are, how they work, and the steps involved in obtaining one.

What is a Pension Sharing Order?

what is a pension sharing order

A Pension Sharing Order is a legal mechanism used in the UK to divide pension assets between divorcing spouses or dissolving civil partners. 

It ensures that one party receives a share of the other’s pension benefits, thereby providing financial security post-divorce. 

The order is granted by the court as part of the financial settlement process and mandates that a specified portion of the pension is transferred from one party to the other. 

How Does a Pension Sharing Order Work?

When a Pension Sharing Order is sent out it entails how much of the pension you’re entitled to receive.

In terms of the amount, the figure is usually expressed as a percentage of the transfer value(s) which is going to be split. 

The day before the Pension Sharing Order comes into effect the final transfer value will be worked out.

What Pensions Will be Taken into Account by the Court When Making a Pension Sharing Order?

sharing a pension after divorce

When making a Pension Sharing Order, the court takes into account several types of pensions to ensure a fair division of assets. 

These include:

State Pensions 

The court can consider the Basic State Pension and the Additional State Pension (such as the State Earnings-Related Pension Scheme, or SERPS, and the State Second Pension, or S2P). 

However, the new State Pension introduced in April 2016 is not directly shareable, though its value may influence the overall financial settlement.

Occupational Pensions 

These are pensions provided by an employer and can be defined benefit (final salary) schemes, where the pension is based on the employee’s salary and years of service. 

Or they can be ‘defined contribution’ schemes, where the pension is based on the amount of money contributed and its investment performance.

Personal Pensions 

These are private pension schemes that individuals arrange themselves, often with financial institutions like banks or insurance companies. They include stakeholder pensions and self-invested personal pensions (SIPPs).

Defined Benefit Pensions

These occupational pensions promise a specific retirement benefit amount, often based on salary and years of service.

Defined Contribution Pensions

These pensions accumulate a pot of money based on contributions and investment returns, which can be used to purchase an annuity or drawdown income in retirement.

How Do You Obtain a Pension Sharing Order?

obtaining a pension sharing order

Pension Sharing orders can only be issued by the family court

If granted, the court will issue a Pension Sharing Order specifying the percentage of the pension to be transferred from one party to the other.

The Pension Sharing Order must be served on the pension provider(s) involved.

The pension provider will implement the order, transferring the specified portion of the pension into a new pension scheme for the receiving party. 

This process must be completed within a set timeframe, typically four months.

Both parties receive confirmation from the pension provider that the pension sharing has been completed.

The receiving party will now have their own independent pension pot, separate from the original pension scheme.

Where Do the Funds From a Pension Sharing Order Go?

You have a few options when it comes to this. 

The person receiving the share of a pension can keep their share with the same pension provider. This is known as an internal transfer. 

This makes this person a member of the pension fund and it will solely be in their name. There is also the option of transferring the share of the pension to a different fund. 

This is known as an external transfer.  

There are certain pension schemes that will only allow internal transfers. These include public sector schemes such as the NHS and civil service jobs. 

On the other hand, there are also schemes that only external transfers, it depends on which scheme you’re a part of. 

If you have an internal transfer scheme then you could gain better benefits as a result. 

What are the Pros and Cons of Pension Sharing Orders?

pros of a pension sharing order


Fair Division of Assets

Pension Sharing Orders allow for a fair and equitable division of pension assets.

This ensures both parties receive a proportionate share based on the value of the pension at the time of the divorce or dissolution.

Each party receives their own separate pension pot, which provides financial independence and security in retirement.

Clarity and Finality

Pension Sharing Orders provide a clear and final settlement regarding pension division, reducing the likelihood of future disputes or financial dependence.

The order specifies exact percentages to be transferred, offering predictability and transparency.


Applicable to various types of pensions, including state, occupational and personal pensions, which allows for comprehensive financial planning.

Can be tailored to fit the unique circumstances of each couple, taking into account individual needs and contributions.

Legal Enforceability

As a court-ordered arrangement, a Pension Sharing Order has legal backing, ensuring compliance by both parties and the pension provider.


Complexity and Cost

Obtaining and implementing a Pension Sharing Order can be expensive, involving legal fees and administrative charges from pension providers.

The process is complex, requiring detailed financial disclosure and depending on the types and value of the pensions involved, a report from a Pension Expert


The entire process, from filing for divorce to implementing the Pension Sharing Order, can take several months to over a year, depending on the case’s complexity and cooperation between parties.

Potential for Reduced Pension Benefits

Splitting a pension can result in reduced retirement benefits for the pension holder, potentially affecting their financial security in retirement.

The need to divide pension assets can complicate retirement planning and may require adjustments to financial goals and strategies.

Uncertain Market Conditions

The value of the pension pot received may fluctuate due to market conditions, which can affect the eventual retirement income of the receiving party.

Tax Implications

While pension sharing generally has neutral tax implications, there can be complexities depending on the type of pension and the specific circumstances of the parties involved.

Understanding Pension Sharing Orders with Brown Turner Ross

Your pension is one of the most important parts of your financial health. 

This is why it is vital that you understand your rights and the laws surrounding pension-sharing orders.

If you’re wondering how your pension might be affected by a pension sharing order then please reach out to us.

We’re a family solicitors who have many years of experience when it comes to pensions and divorce. 

Southport Solicitors

Tel: 0170-454 2002

Fax: 0170-454 3144

11 St George's Place

Lord Street



Liverpool Solicitors

Tel: 0151-236 2233

Fax: 0170-454 3144

The Cotton Exchange Building

Bixteth Street


L3 9LQ