Protect Your Pension in Divorce

If you are going through a divorce and have Private pension pots to consider, then please read on. A divorce can spell not only emotional turmoil but also financial issues to worry about.

If you have a pension plan and are divorcing, then it will likely be considered a joint financial asset in the eyes of the law. If you have not yet divorced and want to know how best to handle things, take a look at five ways you can protect your pension. 

Check the Laws in Your State 

Fact-checking is the first and most crucial step when it comes to protecting your pension plan. Division of a pension is not automatic in some states and jurisdictions, while it is in others. The general rule is that a pension will be divided equally, based on the benefits earned for the duration of the marriage. However, if you were signed up to a defined benefit plan, for 10 years or more prior to getting married, that period could be protected from your spouse being able to make a claim on it.  

Consider Pension Offsetting 

Another way to protect your pension is to consider offering your spouse another asset in place of a slice of your pension. Perhaps, they would want to keep the house you currently share, or you could offset the finances through other savings and investments you have. Or, for instance, if a wife’s pension is worth £150,000 she could give her husband £150,000 cash for a clean break. 

Sharing a Percentage of Your Pension 

To protect some of your pension, you could also consider obtaining a Pension Attachment Order from the courts. As soon as the pension is paid out to the intended recipient, the former spouse will begin receiving whatever percentage of the pension was agreed. The downside here is that there is no clean break as there remains a link between the two parties. Also, if the pension holder dies, the other recipient may then receive nothing in some cases. 

Pension Sharing 

If you want to protect your pension for a period of time then you could consider deferring the payments from it to your former spouse. You will need to acquire a Pension Sharing Order from the courts to do this who will then detail the exact split of the pension (also known as pension credit). This is one way of gaining a clean break. Another option is deferred pension sharing, when payments from a pension to a former partner are delayed for a period of time. There is also a deferred lump sum payment option where the funds are paid to the recipient when the pension holder retires. 

Speak to a Professional 

Finally, in complex financial matters relating to divorce, it’s always worth speaking to a trained legal professional. They can highlight areas that you hadn’t considered and help you prepare for questions and proposals from your soon to be ex-spouse too. Getting in touch with a CDFA (certified divorce financial analysts/mediators) who often work in partnership with legal professionals is also beneficial. They will help you plan financially, taking into account retirement plans, and advise how to divide assets and what the outcome could be. 


Pensions account for the largest part of wealth in the household so understandably, they are an important financial consideration for many divorcing couples. It is also an area of law that can become very complex, therefore seeking the help of an experienced family lawyer or CDFA will stand you in good stead in protecting your pension as much as possible. 

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