9 in 10 divorces leave the pension untouched

There is definitely a perception that including pensions can complicate things when agreeing divorce settlements. We also see younger clients getting divorces less likely to include pensions given the time lag to being able to access them.

Our advice would to get proper legal advice when divorcing to ensure a suitable settlement is agreed and to also to work with a financial planner on what life looks like after divorce, and how the finances will work.

Pensions are easy to ignore in divorce because the family home feels real and immediate, while a pension can feel like money for another lifetime. But that can be an incredibly expensive mistake. Research shows pension sharing happens in only around one in ten divorces.

Women are particularly exposed because career breaks, childcare and part-time work often leave them with smaller pensions. Giving up a claim on a spouse’s pension to keep more of the house can feel like security today, but potentially mean far less financial security in retirement.

My advice is do not treat the pension as an afterthought. Find out what both pensions are worth, understand what income they could provide later, and take appropriate legal and financial advice before agreeing a settlement. A pension may not feel as important as the house today, but your future self may see it very differently.

The pension gets left out of too many divorces because couples take little interest in it and see it as belonging to whoever paid into it. In England and Wales splitting a pension also needs a court order, and most couples leave the marriage without one. Where it is counted, many trade it for a bigger share of the house instead. Women generally hold the smaller pension and are more likely not to know what their own is worth, or whether their ex even had one, so giving up a claim for more of the home can leave them with a house now and too little income later. Nor is the swap like for like: pension money is partly taxed when it's drawn, and a final salary scheme's transfer value can mislead, sometimes enough to tip the deal the wrong way. Trading a pension for a house on headline figures is a bad deal to make blind. Get both pensions valued properly, tax included, and take legal advice before agreeing anything. A pound in a pension isn't a pound in the house.

Pensions are often the most overlooked asset in divorce as couples fixate on housing, living costs and the kids, and ignore what's often the second biggest pot on the table. They're technically messy to value, and without proper disclosure or advice, most people simply keep their own. Over 60% of divorcing couples never secure a legally binding court order, leaving pension claims unmanaged indefinitely. To protect yourself, get full disclosure and CETVs for every scheme early, get specialist advice and seal the agreement with a court Consent Order. Also, don't forget to update your Expression of Wish forms once it's settled.

In my experience, the low number of pension sharing orders does not necessarily mean pensions are being ignored.

Typically, the husband has the larger pension, while the wife may have taken more responsibility for childcare. On divorce, her immediate priority is often retaining the family home, particularly if her income would not support a substantial mortgage elsewhere. The pension may therefore be offset against the house, with the husband retaining more of his pension.

He may then have an immediate incentive to get back onto the property ladder and, if he earns more, may be better placed to do so. By contrast, the ex-wife may have neither the same immediate trigger nor sufficient spare income to rebuild her pension. Unfortunately, that imbalance can remain hidden for years and only become apparent as retirement approaches. That is how the pension gap created by divorce can quietly widen over time.

The one in ten figure is often read as a failure rate, and that is not quite what it is. In my experience a good number of cases genuinely do not need a pension sharing order. Some couples have broadly equal pensions, particularly younger couples who have both been auto enrolled and have similar service. In short marriages there may be very little to divide. And in some cases there are other assets available, so the pensions stay where they are and the balance is found elsewhere. None of that is a failure. A settlement that reaches a fair outcome without a pension sharing order is still a fair outcome. What ought to worry people is that only a third finalise finances through a court order. That's where pensions go missing. Nobody weighed them and decided a share wasn't needed. Women carry the cost. The gap reflects part time hours and years out of work, and they're usually the ones who've never seen the other pension. For them keeping the house instead feels as the safe choice.

Pensions are probably the most overlooked major asset in divorce because they don’t feel like money today. The house is visible and emotionally important, while a pension can feel distant, complicated and somehow belonging to the person whose name is on it. Research found only 11% of divorcees with undrawn pensions had a pension-sharing arrangement.

Women can be particularly exposed because career breaks, childcare and part-time work often mean smaller pension pots. Trading away a claim on a valuable pension to keep more of the house may solve today’s housing problem while creating tomorrow’s retirement problem.

My advice is simple: never treat the pension as an afterthought. Establish what both parties have, understand what those pensions are actually worth and take appropriate legal and financial advice before agreeing the settlement. Divorce divides a financial future, not just today's bank accounts.

It’s alarming to see how little attention is paid to pensions in divorce. They are often the largest asset involved apart from property, yet are massively overlooked. A pension can feel like a distant and complicated asset compared with savings or the family home. There is also a misconception that a pension belongs solely to the person who earned it.

Women generally have smaller pension pots due to career breaks, caring for children, or working part-time, contributing less during those periods. Missing even a few years of contributions can have a serious impact through the lost compound growth, and if divorce happens later in life, there may be fewer remaining working years to make up that shortfall.

Don’t agree to any settlement until you understand the full value of both parties’ pensions alongside other assets. Never assume a pension will simply take care of itself, and ensure that any agreement is legally formalised rather than relying on an informal agreement or someone’s word.