Pension Pact

An interesting overview of pension wealth within relationships by Benjamin Delve of Berry Smith Lawyers

For many couples their principal method of investing for retirement will lie in residential property and/or pension funds. Research published by The University of Manchester in September indicates that 90% of couples have ‘some’ pension wealth between them, with one half having combined pension wealth in excess of £140,000, and one quarter in excess of £435,000.

Notably, of those couples that invested in pensions, roughly one half have 90% of their combined pension wealth in one partner.

Sharing, and distribution, of pension wealth is a complex matter and one that a couple should discussing as they prepare for the future. We are regularly called upon to advise on distribution of pension wealth, more often than not, after the relationship has ended and in circumstances where the parties have not planned, or discussed, how their pension wealth will be shared.

Where the couple are married, the court has the power to share pension wealth, ordering the pension trustees to transfer a portion of pension fund to an alternative fund in favour of the disadvantaged party. Whilst this can resolve the any disparity in pension wealth between the parties, additional issues, including how to deal with contributions made prior to, or following, the relationship, can cause increased strain and difficulty.

In situations where the couple are not married, the parties do not have an automatic right to claim a share of their partner’s investment, regardless of the length of the relationship. To illustrate, where an unmarried person dies without having prepared a will and/or declared their partner as the beneficiary of their pension, the surviving partner will not benefit from the pension. Whilst a claim on the estate can be made, these are often complex, lengthy and expensive proceedings which can be difficult to face in a time of mourning.

It is increasingly helpful for couples, whether married or unmarried, to set out their financial affairs in a formal, written, agreement dealing with, amongst other things, how pensions are to be handled in the event of death and/or relationship breakdown.

If you require any advice in relationship pension sharing, or other family-related legal issues, please feel free to contact a member of our family team on 02920 345511, or by email on