Pensions on divorce

Pensions on divorce – how to exclude pension contributions paid before you got married

Divorce courts can order your pension trustees to share your pension fund between you and your partner.

One question that often arises, particularly if the couple married in their late twenties and beyond is this;

“Can I exclude the pension contributions I paid before we got married from a pension sharing order?”

The answer is often yes although it is far from guaranteed.

Basic Divorce Pension Calculator

All you need for a very basic divorce pension calculation is your pension valuation and a calculator.

First, take the total number of years that you have paid into your pension.

Next, deduct the number of years you were paying into your pension before you got married.

Now divide the lower number by the higher number and then multiply that answer by 100. This will give you a percentage figure. Make a note of it.

Finally enter the cash equivalent value of your pension fund into your calculator and multiply it by the percentage figure.

Here’s an example;

Barry has accrued a pension worth £350,000. He has been paying into his pension for 37 years. He was not married for the first 7 years and therefore only 30 years of pension contributions were within the marriage.

Divide the lower figure by the higher and then multiply by 100. 30 divided by 37 equals 0.81, multiplied by 100 gives 81%.

£350,000 multiplied by 81% equals £283,500.

It follows that Barry can try to argue that only £283,500 of his pension fund should be shared as opposed to the full amount.

What else do I need to do?

The above calculation can only be for the most basic illustration purposes and will only be the starting point. There will often be more complex considerations to be taken into account.

Pension sharing will not be relevant in every case.

Excluding pension contributions prior to getting married might not be possible in every case and, where it is, there is no guarantee that the amount to be excluded will follow the above basic calculation.

In a long marriage, for example, a court might not order a straight pound for pound discount but substitute a smaller discount – as happened in the recently reported case of M v M [2015] EWFC B63.

In other divorces the non-pension owning spouse might be able to argue that he or she needs to share the whole pension in order to make ends meet.

In a short marriage with young partners the court might not want to share the pensions at all.

If the matter was being decided by a Judge then any discount or ringfencing would always be at her or his discretion.

How can I find out more about pension sharing in divorce?

Pensions are specialist areas within divorce law and it is essential that you take legal advice on them.

Get in touch with one of our specialist family law solicitors at Diane Genders Solicitors in Lincoln. You can call us on 01522 516500. Alternatively, email enquiries@dianegenders.co.uk and make an appointment to talk to one of our divorce lawyers.