Pensions and divorce

This guide covers pension sharing orders and pension earmarking/attachment orders. Both pages have been updated to reflect the abolition of the lifetime allowance from 6 April 2024.

They now cover how the lump sum allowance and lump sum and death benefit allowance are impacted by divorce when the pension funds are shared or earmarked by the divorcing parties.

Read our Pensions and divorce guide to learn about:

Pensions and divorce
Pension Sharing
Pension Earmarking

Read the Pensions and divorce guide

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Learning objectives

Be able to explain how pension sharing works.
Be able to explain how pension earmarking works.
Understand the implications from divorce if a member dies before benefits are taken.
Understand the implications from divorce if a member remarries before benefits are taken.

The information on this page is based on our understanding of legislation as at 6 April 2024.

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Question 1: If a couple are getting divorced overseas and they wish to share the benefits held under a UK pension arrangement, what do they need to do?

Move back to the UK

Obtain a pension sharing order from a UK court

Obtain a pension sharing order (or equivalent) from a court in their chosen country

Instruct the pension provider to transfer the shared portion to an overseas provider

Question 2: What generally happens if the member dies after the court order has been finalised but before the pension share is implemented?

The transfer to a pension arrangement for the ex-spouse or ex-civil partner would continue to be processed.

Death benefits would be quoted and settled based on the rules of the scheme or contract.

The ex-spouse or ex-civil partner would receive nothing.

Question 3: Where a member has a protected tax-free lump sum of more than 25% and their pension arrangement is subject to a pension share, would the protected tax-free lump sum be reduced as a result of the pension debit?

Yes

Continuous Professional Development

Completed on:

CPD credit: 30 CPD mins

The User

Pensions and divorce

Completed on: 20 July 2023
CPD credit: 30 CPD mins

CPD Learning covered

Be able to explain how pension sharing works.
Be able to explain how pension earmarking works.
Understand the implications from divorce if a member dies before benefits are taken.
Understand the implications from divorce if a member remarries before benefits are taken.

Article Pensions and divorce

Learning objectives

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CPD Learning covered