Pensions on Divorce

One of the most valuable assets that individuals will accumulate during their working lives is their savings for retirement. It is not uncommon, therefore, that when a marriage, or civil partnership, comes to an end, parties will be concerned about the impact of any financial arrangements on their retirement plan.

Historically, the courts have been willing to give credit for contributions made towards a pension scheme prior to the relationship – particularly where the contributions are significant. Whilst contributions are still relevant, the courts have become increasingly willing to share pension funds on the breakdown of a relationship, including contributions that may have been made prior to a marriage/civil partnership.

Giving weight to the approach being adopted by the court, a report published by the Pension Advisory Group in July 2019, stated that:-

“In a needs case, the court can have resort to any assets to meet the parties needs; in such cases it is rarely appropriate to apportion the pension based on the length of the marriage and existence of the pension…”

Whilst this report is not binding upon the court, and a judge must still consider the contributions made by the parties to the marriage, contributions made towards pensions prior to a marriage/civil-partnership are increasingly being sought on the breakdown of a relationship.

It is increasingly important, where an individual will be bringing investments into a marriage (including pensions), to consider how these will be dealt with in the event that the relationship comes to an end. For many people there remains a stigma attached to the notion of ‘nuptial agreements’, however, they are becoming increasingly important for couples who wish to take control, of their future financial arrangements, into their own hands.

If you would like any further information or advice on nuptial agreements, or pension sharing on relationship breakdown, please contact our Family Team on 02920 345511 / 01656 645525 or