When a marriage breaks down, dividing assets fairly is rarely simple and pensions are often the most complicated piece of the puzzle. If you or your spouse built up a pension during the marriage, you may be wondering whether it can be shared as part of a divorce settlement.
The short answer is yes, but how much and on what basis depends on a number of factors.
This blog explains how pensions built up during a marriage are treated on divorce, and what you need to know if pensions are likely to feature in your financial settlement.
Pensions built during the marriage are generally shareable
The starting point in English and Welsh family law is that assets accumulated during the marriage, sometimes called “matrimonial assets”, are usually divided equally between the parties on divorce. This includes pensions that were built up from the date of the marriage to the date of separation.
So if your spouse was paying into a workplace pension throughout your marriage, that pension pot is very likely to be in the frame when it comes to dividing finances. The same applies to any pension contributions you made during that time.
The court has wide-ranging powers to deal with pensions on divorce, including making what is known as a pension sharing order. This transfers a percentage of one spouse’s pension to the other, giving the receiving spouse their own independent pension entitlement.
What about growth after separation?
This is where things get a little more nuanced. While contributions made during the marriage are generally treated as matrimonial, passive growth in a pension that occurs after the couple have separated may be viewed differently.
In a recent case, BS v HC, the court considered how to apportion a husband’s pension worth over £3 million, part of which had grown simply because of investment performance after the parties had separated.
The judge confirmed that courts will look carefully at what portion of a pension is genuinely matrimonial and what portion reflects pre-marriage contributions or post-separation growth, before deciding what a fair share looks like.
This doesn’t mean post-separation growth is automatically excluded; the court retains a broad discretion, but it does mean the picture can be more complex than simply splitting a pension down the middle.
Can a pension become “more” matrimonial over time?
Yes, in some circumstances. The concept of “matrimonialisation” describes what happens when an asset that might otherwise be treated as one person’s own becomes woven into the couple’s shared finances.
With most assets, a house, savings, and investments, this happens through joint use and enjoyment. With pensions, it is slightly different, because you don’t “use” a pension during the marriage. However, the case of BS v HC made clear that a shared intention about the pension and financial decisions made by one spouse in reliance on that intention can be enough to bring a pension more firmly into the matrimonial pot.
For example, if one spouse chose not to pay into their own pension because the couple agreed they would rely on the other’s pension together in retirement, that kind of reliance could be relevant when the court decides how to divide things fairly.
How does the court decide what is fair?
Courts don’t apply a rigid formula. They consider a range of factors, including the length of the marriage, each party’s financial needs, any children, and the overall picture of the couple’s assets and liabilities.
When it comes to pensions specifically, expert actuarial evidence is often used to help identify what proportion of a pension was built up during the marriage. However, as the BS v HC case confirmed, these technical calculations are helpful but not the final word; the court always takes a step back to consider what outcome is genuinely fair.
In practice, this means that even a pension largely built up during the marriage may not always be split equally if the overall circumstances point to a different outcome. Equally, a pension with significant pre-marriage elements might still justify a pension share where one spouse’s needs require it.
How Dudden Law can help
Pensions are often the largest financial asset in a marriage, yet they are one of the most frequently misunderstood. Whether you are concerned about protecting your own pension or ensuring you receive a fair share of your spouse’s, getting the right advice early can make a real difference to the outcome.
At Dudden Law, our family law team in Cardiff supports clients across South Wales through every aspect of financial settlements on divorce, including complex pension matters.
We’re here to help
We understand that divorce can feel overwhelming, particularly when finances are involved. At Dudden Law, we offer a free first consultation, a no-obligation chance to talk through your situation and understand your options.
Our friendly team is based in Cardiff and supports clients across South Wales and beyond. Book your free consultation or call 02921 320 150 or email family@duddenlaw.co.uk.
Insights from Megan Waugh
Solicitor
