Divorce: Divorce and Pensions

In very broad terms, the longer the marriage, the more likely it is that pension funds will have to be used in order to achieve a fair settlement. If it is your pension fund that is going to be in question, then the older you are, the more likely it is to be a feature in a fair solution.

If it is your husband’s or your wife’s pension fund that must be considered, your own age will be important in the question of whether or not you have time to build up a pension fund of your own.

If you both have some pension provision, it might be easier to settle a fair and balanced agreement without disturbing either fund.

If you are both earning about the same amount per year, and you have time to invest in future security, it may not be necessary to disturb any of the pension arrangements.

If you have a sufficient salary to enable you to build up your own pension fund, you may not need any of your husband's or wife's pension fund to achieve a fair settlement.

If you are the one who has a large pension to look forward to, and you also have a high salary now, it may be appropriate to transfer part of the fund to your husband or wife who has much less in security for the future.

If your spouse is on a lower salary, and has urgent need of capital for accommodation, it may be better to agree for them to have a greater share of the available assets now to provide a home. It may be better to agree to an arrangement like this, and keep your pension fund intact, rather than splitting each financial item between you, including your pension fund.

As a very simple example, if you have just two assets, a house and a pension fund, of about the same value, you might find you can agree to the person with lower pay and urgent needs having the house, and the other keeping the pension fund. This is called off-setting.