/ Divorce / Impact of divorce on pensions

What impact does divorce have on my pension?

In many cases, pensions are among the most valuable assets acquired during a marriage (second only to the matrimonial home). 

But they often get overlooked during financial negotiations. 

If one spouse has a valuable pension, the other can claim a portion of it as part of a financial settlement.

Disclaimer

This guide outlines general topics you should be thinking about if you want to get a divorce in Northern Ireland. But it is not legal advice. If you need legal advice, you should contact a specialist divorce solicitor for advice on your specific circumstances.

What impact does divorce have on my pension?

Along with the family home, pensions are often among the most valuable assets acquired during a marriage.

During financial settlement negotiations, pensions can sometimes be overlooked, with the focus instead being on more tangible assets (the family home being a perfect example).

Part of the reason why pensions are sometimes forgotten is that they are difficult to value, and you may require the help of an accountant or an actuary assess what a pension is worth.

If one spouse has a valuable pension, the court can make orders to share it with the other spouse as part of a financial settlement after divorce.

Legislation in this area includes Article 27 of the Matrimonial Causes NI Order, amended by Section 162 of the Pensions NI Order 1995.

Two options open to the court include:

  • Pension Sharing Order

The spouse’s pension scheme will be debited by a specified amount which will be shared with the other spouse. In effect, the transferring spouse will lose part of their pension and the receiving spouse will receive a new pension in their own name.

  • Earmarking Order

When a spouse’s pension becomes payable, the pension administrators will be required to pay either part of the pension or a lump some to the other spouse.

Earmarking Orders are used less frequently now, with most people opting for the flexibility offered by Pension Sharing Orders. Spouses can opt to combine Pension Sharing Orders with other aspects of the settlement – for example, offsetting it against a share in the family home or other property.

Given the complexities in this area, and the substantial sums of money that can be involved, you really should take advice from a professional in this area, that is tailored to your individual circumstances.

Any mistakes made in this area could be extremely costly at a later stage.

The above article is part of our guide on how to get a divorce in Northern Ireland.

If you are thinking about getting a divorce, you should get in touch with a Northern Ireland specialist divorce solicitor who will be able to provide advice tailored to your own personal circumstances.

If you have any questions, you are very welcome to get in touch.

All the best,

The Team @ Lightlaw
Every effort is made to keep this guide up to date. Although it is not to be regarded as legal advice, we strive to make sure the information is helpful, accurate and practical. If you are a Northern Ireland divorce solicitor and have spotted an inaccuracy, you can submit a suggested change.
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