My husband and I got divorced. Our divorce didn’t say we couldn’t share pensions, so I wondered if I was entitled to a share of his private pension?
From 2016, I can no longer use his national insurance contributions and found myself with nothing and four children at the time.
SCROLL DOWN FOR HOW TO ASK STEVE YOUR RETIREMENT QUESTION
Retirement and Divorce Question: Our divorce didn’t say we couldn’t split pensions, so I wondered if I was entitled to a share of his private pension?
Steve Webb responds: Pension sharing in divorce cases is a complex area and it is always a good idea to get professional advice if possible.
While paying for advice might seem expensive, the cost can often be recouped multiple times if you get a better deal in this way. But let me give you some general information on how the process works.
Regarding the state pension, as you suggest, the situation of divorced people depends on whether you reached the state pension age before or after April 6, 2016.
If you have reached retirement age before that date, you fall under the “old” state pension system.
Under this system, a person who is still divorced at retirement age (therefore who has not remarried) must benefit from the contributions of his ex-spouse until the date of his divorce. These can be used to increase their basic state pension.
Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below
In addition, any “additional” state pension (often referred to as SERPS) to which an ex-spouse is entitled can be shared, but only as part of a formal divorce settlement signed by a court.
Those who divorce * after * reaching retirement age can have their basic state pension reviewed, but they must notify DWP of their divorce for this to happen.
For those who reach retirement age on or after April 6, 2016, the new public pension system makes very little provision for those who divorce.
In particular, there is no general provision allowing the contributions of a former spouse to be used to increase your own state pension.
However, if your ex-spouse had a relatively large state pension entitlement (a entitlement above the standard flat rate), any excess above the flat rate can in principle be shared.
Again, this should be part of a formal divorce settlement.
In terms of private pensions, there are different ways for a person who divorces to benefit from their ex-spouse’s pensions, and different rules may apply in Scotland than in the rest of the UK.
In England and Wales, the three main ways to get your ex-spouse’s pension are:
- “Pension sharing”, when you receive part of the value of your ex-spouse’s pension at the time of the divorce; this could be done, for example, by transferring their pension to a new or existing pension in your name, or by making you join their occupational pension scheme on your own; this is available for divorces after December 1, 2000.
- ‘Compensate for’, where your ex-spouse’s pensions are valued and you receive something more * instead of * a share of their pension; for example, in exchange for not claiming a share of your ex-spouse’s pension, you might be able to negotiate a larger share of the value of a family home;
- “Allocation” of pensions (technically known as a “connecting order”), where you are entitled to receive part of your ex-spouse’s pension from their pension plan; for example, if they are affiliated with an occupational pension plan, you will receive part of their pension when they receive it; this approach is used much less today than in the past, in particular because it does not foresee a “clean break” with your ex-spouse.
There are pros and cons for each approach, and the assessment of pension rights is a very complex matter, so it is very important to get professional advice if possible.
If you had a court order when you got divorced, it would usually be very difficult to reopen this settlement now, even if there had been no pension allowance at the time.
However, if there was no court order then, it might be possible to get a court order now, and that could take pensions into account.
But so long has passed since you got divorced, the court may decide that it is not fair to open things up at this point. Again, you would need to take legal advice.
A very useful guide for consumers on how pensions are managed in the event of divorce can be found at: Guide to Survivor Pensions in Divorce | Tips now.
Ask Steve Webb about the pension
Former Pensions Minister Steve Webb is This Is Money’s Agony uncle.
It’s ready to answer your questions, whether you’re still saving, quitting work, or juggling your finances in retirement.
Steve left the Department for Work and Pensions after the May 2015 election. He is now a partner in the actuarial and consulting firm Lane Clark & Peacock.
If you would like to ask Steve a question about pensions, please email him at [email protected].
Steve will do his best to respond to your post in a future column, but he won’t be able to respond to everyone or correspond privately with readers. Nothing in his responses constitutes regulated financial advice. The published questions are sometimes edited for brevity or for other reasons.
Please include a daytime contact number with your message – it will be kept confidential and will not be used for marketing purposes.
If Steve is unable to answer your question, you can also contact The Pensions Advisory Service, a government-backed organization that offers free assistance to the public. TPAS can be found here and its number is 0800 011 3797.
StevWe receive many questions about state pension plans and COPE – the equivalent of contracted pension. If you write to Steve on this topic, he answers a typical reader question here. It includes links to several of Steve’s previous columns on state retirement forecasting and contracting out, which might be helpful.
Share or comment on this article:
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.