What is a pension sharing order? – the complete guide

When you’re dividing your finances on divorce or separation, one aspect that is often taken into account is your pension. If you’re including your pension(s) in this process, they will be included through something called a pension sharing order.

The court has the power to make a pension sharing order upon divorce or dissolution of civil partnerships. All references below to “spouse” and “divorce” apply equally to civil partners and dissolution proceedings.

What needs doing beforehand?

A pension sharing order will require one former spouse’s pension provider to give some, or all, of the funds in that pension plan to their ex (the ‘recipient’). A pension sharing order can be made in respect of a pension either before or after it is in payment.

The money that comes out of the pension plan (called a pension debit) is paid into the recipient’s separate pension plan. This may be their existing pension plan, or a newly credited pension set up ready to receive the pension credit.

One benefit of getting a pension sharing order is that former spouses can become financially independent of each other in terms of their pensions. Once the pension sharing order has been implemented (so when the pension credit/debit has taken place), each has control of their own pension funds and can draw-down from their plans at a time that is right for them.

Do I need a pension sharing order?

If you’re unsure as to whether a pension sharing order is right for you both, we have written a helpful guide which you can read here.

Do we decide how much will be paid out of the pension plan?

You and your ex can agree how much will be transferred from the pension fund but for the court, this must be expressed as the percentage of the pension cash equivalent transfer value (CETV) that will be paid to the recipient. The pension sharing order can only state a percentage, not a fixed amount.

When you’re agreeing the percentage, you are likely to be basing it on a recent CETV for that pension. Bear in mind that the pension debit/credit which is paid out of the pension when the pension sharing order is implemented may be slightly different to what you expect it to be given that pension values go up and down - sometimes daily.

As discussed in our guide on pension sharing orders you may want to take the advice of a ‘pensions on divorce’ expert (a PODE) to help you decide upon the details of your pension sharing order, such as which pension plan(s) you want the pension sharing order to apply to and what percentage(s) should be transferred to the recipient.

Can we share more than one pension?

Yes, a pension sharing order can cover multiple pensions and the percentage to be transferred out of each pension plan can be different.

How do I get a pension sharing order?

To obtain a pension sharing order you will need to first submit for divorce and reach what’s called the 'conditional order' (formerly called the ‘decree nisi'). The conditional order is the middle part of your divorce when a judge agrees that the divorce can proceed.

When a judge agrees that you can divorce, you can then submit a draft consent order (a financial remedy order) to the court. The draft consent order sets out what orders you want the court to make to achieve your financial settlement. The draft consent order can include a pension sharing order, along with a pension sharing annex (a Form P1). 

Who can help me get a pension sharing order? 

You will need support from someone who is legally trained as it’s not a straightforward process.

Note : You can read more about why a consent order needs to be drafted by an expert here. Remember, ‘legally trained’ doesn’t mean you have to go down the solicitor’s route though.

amicable offers a range of divorce-diagnostic for couples (so no need to hire two separate solicitors) that help with legalising your financial split as well as negotiating your agreement if needed.

You can find out about the different divorce-diagnostic we offer  here.  

The pension sharing order and the pension sharing annex must be carefully drafted. It is important to send a copy of the draft consent order and the annex to the pension provider before the documents go to court. This is so that the pension provider can check the contents and any amendments can be carried before the papers go off to the court. Trying to get any errors in the pension sharing order or the annex changed at a later date can be a time consuming and potentially costly process!

I’m already divorced, can I still make a claim against my ex’s pension?

If you didn’t get a financial remedy order when you divorced, then either party can make a claim on their ex-spouse’s pension regardless of how long ago the divorce took place.

To avoid any nasty surprises down the road regarding your pension or retirement benefits, it is important to ask the court to approve a financial consent order at the time of your divorce.

Will my pension provider charge me for sharing my pension?

Many pension providers will charge for the work required to implement your pension sharing order, although some do not charge at all. It’s a good idea to check the pension providers’ fees in advance as they can range from £0 to £4,000. Some providers will agree to deducting the fees from the pension plan, but you must ask them to confirm this. You and your ex will need to agree how any fees will be paid before you send the paperwork to court.

Where will the recipient’s pension credit go?

There are two options: an ‘internal’ or an ‘external’ transfer…

• An internal transfer means that the existing pension provider will create a new pension plan for the recipient which is entirely separate from their ex’s pension. Some public sector pensions will only allow an internal transfer.

• An external transfer means that the pension credit will be sent to a pension plan run by a different pension provider. The recipient chooses which plan it will be paid into. This could be an existing pension arrangement or one that the recipient sets up ready to receive the pension credit. You will need to check that the proposed pension plan will definitely accept a pension credit from your ex’s pension provider.

It's important to take independent financial advice when choosing which pension arrangement, you want the pension credit to go into. A solicitor cannot give financial advice. It is best to speak with a financial adviser who specialises in pensions on divorce.

How long does it take to get a pension sharing order?

On average, to complete the legal process of divorcing and to get your consent order approved by the court takes seven to nine months.

This timeline comes from amicable’s data, if you’re using a different route such as the court, it could take a lot longer. If you’d like to learn more about speeding up the process and getting it all done asap, you can read our blog here.

How long does it take to get the CETVs back from pension providers?

Importantly, some pension providers can take a long time to produce the figures you will need to provide the court with when you apply for a consent order. So be sure to request your pension CETVs as soon as possible. 

What happens once the pension sharing order is made?

Once the court has approved your consent order and made your pension sharing order, the pension debit/credit does not automatically happen.

The pensions sharing order only becomes legally binding, or “takes effect”, on whichever is the later of these two dates:

• the date of the final order (formerly called the decree absolute) or
• 28 days from the date of the pension sharing order (7 days after the time given to appeal the order, runs out)

Can I apply for my final order after my consent order is made?

If you apply for the final order straight after the consent order is made, your divorce will be finalised before the pension sharing order takes effect. This can put the intended recipient in a very vulnerable position. If the pension holder were to die before the 28 days had passed, the recipient may financially lose out. As they would no longer be a spouse of the deceased, they wouldn’t be entitled to receive valuable spousal death benefits under the pension. They would also lose out on the pension credit as the pension sharing order would never take effect.

Because of this, it’s best to wait 28 days from the date of the pension sharing order before applying for your final order (some financial remedy orders actually state this, in which case you must definitely wait). The pension sharing order will then takes effect as soon as the final order is made.

How quickly will the pension provider(s) implement the pension sharing order?

As soon as you have your final order from the court, you can send all the necessary documentation to the pension provider(s) and ask them to implement the pension sharing order. You will need to send the following to them:

• The original consent order stamped by the court,
• The original pension sharing annex (Form P1) stamped by the court,
• A copy of the final order (formerly called the decree absolute),
• A copy of the conditional order or decree nisi certificate
• Payment of their charges (if there are any)
• If it is to be an external transfer, the details of the new pension scheme that is going to receive the pension credit.

The pension provider then has 4 months from the date of receiving the documents to implement the order.

How much does it cost to get a pension sharing order? 

The cost of getting help to obtain a pension sharing order depends on who is helping you to divorce (i.e. amicable or solicitors, etc). The cost will also depend upon whether you are in agreement with each other, the type and how many pensions you have and whether or not you decide get advice from a PODE (pension on divorce expert).

If you would like to learn more information on the cost of divorce, read our helpful guide  for a breakdown of the different routes and how much they cost.  

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• Divorce Financial Settlement
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