What is a pension sharing order?

A pension sharing order is a court order, made on or after a divorce, that transfers a percentage of one person's pension to the other. The member's pension is reduced by a pension debit and the ex-partner receives a pension credit of the same value in their own name.

How it works

  1. 1

    The pension is valued

    The scheme provides a cash equivalent transfer value.

  2. 2

    The court sets a percentage

    The order says what share of that value moves.

  3. 3

    The debit and the credit

    The member's rights fall by the pension debit. The ex-partner receives a pension credit of the same value.

  4. 4

    The credit is invested

    It stays in the same scheme in the ex-partner's name or moves to a pension of their choosing, depending on the scheme.

The effect on each of you

For the person receiving it
The pension credit is theirs, taken under the normal pension rules. It does not count towards their annual allowance. If it came from a pension already being paid, they cannot take a tax-free lump sum from it.
For the person giving it
Their pension is permanently smaller. They can pay in again to rebuild it within the normal limits on tax relief, though doing so can lose certain protections taken on or after 15 March 2023.
Against an attachment order
An attachment order leaves the pension with the member and pays a share when it is paid, so the ex-partner waits on the member's choices and on the member being alive. Sharing gives each of you a separate pension.

A sharing order ends the link between you. An attachment order leaves your ex-partner's money tied to your pension for as long as it pays.

Related questions

Who decides the percentage?

The court, or in Scotland it can be agreed between you in a legally binding agreement. Your solicitors negotiate it.

Is a pension sharing order the same in Northern Ireland?

Pension sharing is available in Northern Ireland under its own legislation, the Welfare Reform and Pensions (Northern Ireland) Order 1999.

Can a final salary pension be shared?

Yes. The receiving ex-partner may be given rights in the same scheme or a transfer value to invest elsewhere, depending on the scheme.

Where this fits

What the pension credit should become is the decision that follows the order.

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The advisers for this subject

Sunny Bharj

Sunny Bharj

Independent Financial Adviser

Tony Springer

Tony Springer

Independent Financial Adviser

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A first conversation of about twenty minutes, at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.