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Pensions and divorce

In divorce settlements, more often than not, there are two large assets to be considered – the main residence and any pension rights. After the matrimonial home, the pension fund is, for many people, the most substantial financial investment they will ever make. It is also a resource which is most likely to be lost to one party (traditionally the wife/civil partner) on divorce if no action is taken. 

Since the Matrimonial Causes Act 1973 (MCA1973), courts in England and Wales have had the power to take the value of personal and occupational pensions into account when settling the matrimonial estate, although this is not compulsory. The Matrimonial Causes (Northern Ireland) Order 1978 gave similar provisions to courts in Northern Ireland, and the Family Law (Scotland) Act 1985 set out the principles to be applied in Scotland.

The present law on the subject of pensions remains complicated. There are various ways in which courts may deal with a pension on divorce. 

These can be summarised as follows: 

Download the 'Pensions and divorce' guide or view our video below for more information.

Pensions and divorce

The effect of the pension freedom reforms.

Pensions and divorce transcript

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Important information

The videos are designed to give professional financial advisers technical information on retirement planning and pensions legislation as part of the CII’s 2019-20 syllabus, and should not be relied upon.

No statements or representations made in these videos are legally binding on Fidelity or the recipient and no liability is accepted in connection with this material or any matter discussed. FundsNetwork cannot give advice regarding tax.

The suitability of various options for pensions on divorce will depend on the particular circumstances of each individual. Different options may have different effects for tax purposes, different implications for pension provision and different impacts on other assets and financial planning, as well as different legal impacts on the distribution of assets on divorce.

This page provides information and is only intended to provide an overview of the current law in this area as at December 2019 and does not constitute financial advice, tax advice or legal advice, or provide any recommendations. This is a complicated area, and individuals going through a divorce should take tailored, appropriate advice about their financial settlement on divorce and future tax and financial planning.

Tax limits, allowances and rules are often subject to change and may change in future. Individuals should check that tax limits, allowances and rules have not changed.