By Laura Woolard

Associate Solicitor

19 September 2025

Insights News

When couples separate, the focus often falls on the family home, savings and day to day finances. There is one asset that is regularly overlooked – and it could be one of the most valuable in the entire settlement: pensions.

Pensions can represent a significant proportion of a person’s wealth. In some cases, they are the single largest asset, exceeding even the value of the family home. For example, a long career in the public sector or with an employer with a final salary pension scheme can create entitlement worth hundreds of thousands of pounds. Failing to consider pensions properly during divorce proceedings risks leaving one spouse – often the one who took time out of work for childcare – at a serious financial disadvantage in later life.

The law is clear: pensions form part of the “matrimonial pot” and should be taken into account, regardless of whose name they are in. The most common way for pensions to be dealt with is by way of a pension sharing order, meaning that a percentage of that spouse’s pension is transferred into the other’s name. This creates a clean break, giving each party their own separate pension provision.

Where assets and income are more limited, offsetting is often considered – where the value of the pension is offset against other assets, commonly the family home. For example, one spouse might keep a larger share of the family home, while the other retains more or all of their pension. This requires careful consideration and valuation, as pensions and property are not always directly comparable.

A common pitfall is that pensions can be undervalued and cash equivalent transfer values (CETVs) can be misleading, especially for defined benefit schemes such as final salary pension schemes. This makes it difficult to accurately compare pension schemes and highlights the importance of considering the instruction of a pensions on divorce expert (PODE) to provide an actuarial report to ensure that settlements are fair and sustainable in the longer term.

Pensions are not just a future concern, although for parents concerned with ensuring they have suitable housing for their children it can be easy to overlook their value to focus on more immediate needs. Overlooking pensions in divorce settlements can create significant financial inequality later in life. Whether negotiating privately, through mediation, or in court, it is vital to include pensions in the discussion and obtain specialist advice where necessary.

Should you require further information or wish to discuss the treatment of pensions within divorce proceedings, please do not hesitate to contact the Family team here, who will be happy to discuss your circumstances with you and guide you through your options.

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Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.