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Agreeing Pension Division in Divorce Scotland

March 5, 2024 Family Law

Pension division in Divorce Scotland

Family Law

In divorce proceedings in Scotland, pension division plays a crucial role in ensuring a fair financial settlement between former spouses or civil partners. When considering the division of valuable assets such as pensions, the court may issue a pension sharing order to allocate a percentage share of one spouse’s pension to the other, or it may opt for pension earmarking, where the value of the pension is earmarked to be paid to the other spouse upon retirement.

The value of the pension, often determined through a pension valuation process, takes into account factors such as the total value of the pension fund, pension contributions made during the marriage, and the cash equivalent transfer value. This valuation helps the court determine a fair division, considering the date of separation and the state pension age of each party.

What happens to my pension after divorce?

New analysis has shown that private pension wealth is the biggest component of household wealth in the UK, and has highlighted how important it is that this wealth is separated fairly in the for the future financial well-being and benefit of both parties.

In the process of a divorce, it’s not just the family home to be considered, pensions are considered along with all other financial assets. Once all assets have been disclosed, our team of divorce experts can advise you on what you are entitled to.

It is not uncommon for a pension fund to be one of the most valuable assets in a divorce financial settlement, and how pensions are treated becomes crucial.

In the beginning, the first step is to obtain a pension valuation before examining how an equalization of pension pots can be achieved between both parties.

Impacting factors

Several factors can impact determining a fair figure when considering equalization of the pension value. For example, we can advise you on whether pre-marital contributions will affect this.

In some cases, adjustments may be warranted taking into the account the age of you and your spouse, along with any health conditions.

Achieving equalization may require one party to transfer some of their pension schemes funds to the other spouse.

Family Law Figures

The analysis below follows the latest statistical release on divorce in England and Wales from the Office for National Statistics, which revealed that although the overall number of divorces has fallen, the average age of divorce has reached an all-time high at 45 years and 11 months for men and 43 years and six months for women.

For both sexes, the average age of divorce has been rising by about three months every year over the past decade.

Aviva Statistics

According to Aviva, the UK holds a massive £11.1 trillion pounds in household wealth. Private pensions represent the biggest single component of this wealth – at about 40% of the £11.1 trillion total.

Aviva estimates that a typical couple could have about £120,000 in combined private pension assets if they were to divorce in their 50s, assuming they married when aged 30.

“It is typical for our wealth to grow as we age,” commented Alistair McQueen, Head of Savings & Retirement at Aviva. “A rising average age of divorce will therefore typically bring with it a larger pool of wealth to separate.

With the average age of divorce at an all-time high, it is fair to assume levels of wealth at a time of divorce may also be at an all-time high.”

“With the average age of divorce higher than ever, agreeing a fair separation of pension assets is more important than ever,” he added.

Pension on Divorce

Pension sharing

This is the most common way of dividing retirement pots. With a pension sharing order, a portion of one party’s pension, referred to as a pension credit, is transferred to the other.

This must be into either an existing fund or a pension plan set up for that purpose, and the court is responsible to decide what is a fair percentage split.


Do all pensions come under consideration during divorce ?

Your ex-partner might have a claim to your private pension, but they won’t have any entitlement to your primary UK state pensions. Currently the state pension age is 66 and the additional state pension is subject to sharing possibilities.

If either you or your spouse possesses a private pension scheme, it is obligatory to reveal it as part of the financial disclosure in the divorce proceedings. Your spouse would need to share the value of the pension and discussion would take place to agree a percentage share.

This includes the disclosure of all pensions, whether they are from the UK or abroad.

Do you require a pension sharing order?

Does my spouse have a claim to a portion of my pension?

The potential division of a pension depends on unique circumstances. Typically, most pension funds are regarded as matrimonial assets and the assets are subject to consideration for being divided.

However, certain circumstances may lead a court to decide against dividing a pension and setting up a pension sharing agreement, often falling into one of these categories:

1.     The marriage was brief, and dividing the pension fund would be deemed inequitable.

2.     The fund is of modest value, making the cost of division impractical.

3.     The fund has been accrued post-separation date.

4.     The fund income was accumulated before the marriage.

If you’ve separated from your spouse but haven’t secured a consent order or court decree formalising your financial arrangement, your former spouse retains the ability to receive a share of your UK pension.

Of course, we understand that making contact with a Solicitor is a difficult step to take and you may be at a point where no decisions have been made. However, we regularly provide advice and support to individuals who have not separated, but wish to be aware of their rights and obligations and the services we can offer in the event of a potential separation.

At Jones Whyte we are fully aware that everybody’s circumstances are unique to them and we pride ourselves in the manner in which we guide individuals through separation.

 In Summary

Remember, divorce and pensions can be a complicated area of law. It’s important to consider pension benefits as they are seen as part of the matrimonial property and a pension sharing agreement could be required. A pension evaluation is essential to understand the total value for a fair division and overall a fair settlement.

 Contact us

For expert legal advice on pension division, or other aspects of divorce or separation, then contact our specialist family lawyers for support today using the contact details below.

At Jones Whyte, our specialist divorce lawyers have helped clients all over the country, ensuring their interests are protected during separation or divorce. We have also appeared in courts across the country.

Contact the Jones Whyte Family Law Team today for the guidance you need. Call us now on 0800 292 2035.

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