Pensions are one of the trickier areas of financial settlements. They often require third-party insight, for example from a pensions on divorce expert (PODE) or an actuary. There are often multiple hoops to jump through in order to understand the value of a pension at the time of separation, and what it could look like at retirement.
For example, a CETV documents the cash equivalent transfer value at the time, but a pension report will also be needed to illustrate the pension share that’s required and what income it would provide in retirement. This, combined with the mistaken belief that pensions are sole assets, means they are too commonly overlooked, despite often being the second largest matrimonial asset.
However, not considering pensions can have a significant impact on long-term financial security. Often, one party in the marriage has taken a career break, worked part time or not worked at all in order to raise children and manage the household. This can leave them with a far smaller pension pot than the ‘breadwinner’ in the relationship.
In 2023, the Fair Shares Project conducted an academic study examining finances on divorce, highlighting significant gendered outcomes in relation to pensions. The study found that 28% of women had under £1000 take-home pay, compared to just 10% of men, and men often had more valuable pensions. The gender pensions gap is estimated to be around 38%. Yet, Scottish Widows and the Institute and Faculty of Actuaries (IFoA) found that only 30% of divorcing couples include pensions in their financial settlement.
To understand more about why pensions matter and how they work in divorce, read our latest guidance.
The family court does not have a specific obligation at present to consider marital accrual of pensions when deciding on a division of assets in divorce, and certainly does not consider pension sharing at all as an option for cohabitation disputes between unmarried couples. Therefore, there are two questions posed in the Government’s consultation, ‘A fairer end to relationships’ which closed on 14 th August 2026:
- Should the family court have an obligation to consider marital accrual of pensions in divorce?
- Should pensions be considered as a tool to meet financial needs when cohabitees separate?
What has the Government proposed regarding pension management in divorce?
The consultation ‘A fairer end to relationships’ explores a range of issues regarding divorce and separation where the existing family law framework could be bettered. There are several intended outcomes to this:
- To make financial outcomes in divorce more predictable
- To support family lawyers in advising clients
- To help clients understand how money, property and assets are divided in divorce
- To protect financially vulnerable individuals in cohabiting relationships on separation or the death of a partner
Regarding pensions, the proposals within the consultation firstly focus on how pensions should be dealt with at the end of a marriage, and whether it should be put into statute that courts should have a specific obligation to consider the pension needs of both parties.
This proposal is welcomed. So many people going through divorce cannot fully comprehend the life-long implications of decisions they are making when emotions are heightened. Divorce feels very immediate and, naturally, life-changing. Clients will often fight to keep as much of the life they know as it is, often trading short term comfort and familiarity over medium to long-term security. Pensions are the fallout of this. Women in particular will often choose to ignore their right to claim on their spouse’s pension, or will not know in the first place that this is available to them, instead they will fight to retain the family home.
It is not a new suggestion that pensions should be required to be considered, even if the parties then decide to retain their own and not implement any kind of sharing. However, the consultation finally has presented this as a potential reform.
The court should absolutely be required to consider pensions in every case, including where the consent order draft has already been presented for approval. This should not, however, mean that pensions accrued during the marriage should automatically be shared or divided equally. This would be based, as with financial assets generally, on the sharing and needs principles as appropriate in individual cases.
The options for division of any pensions should this be appropriate should remain the same:
- Pension sharing;
- Pension offsetting; and, more rarely,
- Pension earmarking.
The court would also continue to consider any pre-nuptial agreements (which are not currently legally binding in England and Wales) where pensions are not shared. The court would still need to ensure that this issue is considered before approving a financial settlement.
How should a statutory requirement to review pensions be enforced?
There are currently numerous resources available for both legal professionals and their clients about how to best understand short, medium and long-term finances, how pension schemes work, and how to request a pension sharing order be executed. For example, existing materials are already produced by the Pension Advisory Group. However, there should be more accessible information for clients, particularly for litigants-in-person who are potentially the most at risk, as this is a complex area.
This should also be extended to better professional education for lawyers, with further training for the judiciary and practitioners to mitigate any inconsistencies in advice.
Pension on Divorce Experts (PODEs) whilst already playing a considerable role in many financial cases, could be utilised at an earlier stage. PODEs assess the benefits of the pensions, and make suggestions as to how it could be split fairly. They report to the family court, and cannot offer advice to either party. It could be an option, in order to better enforce the required consideration of pensions, for a PODE to have an early triage role in financial remedy proceedings. The PODE could review the positions of both parties and advise whether a specialist report is required at an early stage.
Earlier education is essential, regardless of whether the proposals for a statutory requirement ever become law. Better financial education as part of the school curriculum, including the financial consequences of marriage, cohabitation, parenthood and generally working life, should be an important consideration of the Government going forwards.
Cohabitation and pensions: should unmarried couples get a share of their partner’s pension?
Within the Government’s consultation, A fairer end to relationships, there was extensive discussion on the rights of unmarried couples and whether there should be a framework in place to offer rights, including for cohabitation and pension rights.
Solicitor’s tip: Currently, unmarried, cohabiting couples have very little legal or financial recourse if they separate or one party dies. They may have property claims under the Trust of Land and Appointment of Trustees Act (TOLATA) and claims for financial support for the benefit of children under Schedule 1 of the Children Act 1989, but that is the extent. The reality is very different to what many cohabitants believe they have under ‘a common law marriage’ – unfortunately this is a myth.
The Government asked for responses on:
- How cohabitees should be defined and the concept of the ‘enduring family relationship’ should mean
- Whether there should be a minimum time frame and other qualifying criteria
- Whether qualifying cohabitants should have some legal rights, similar to those enjoyed by married couples
As part of this, because married couples are entitled to claim on their spouse’s pension, the Government put forward proposals for cohabitants:
“The Government proposes that, where cohabitants meet the qualifying criteria under the new framework, the court should have access to a broad set of remedies which reflect what is available on divorce, including property adjustment orders, lump sum orders and pension sharing orders.”
Importantly any financial remedies that cohabitants may be entitled to would be on a much narrower basis than for married couples. The outcome would be driven solely by needs, and the concept of sharing would not be applicable.
Rachel Fisher, a lawyer based in Stowe’s Bristol family law office, explains:
“The intention of offering such rights to cohabitants is to protect financially vulnerable parties who may have been homemakers for much of the relationship or earned considerably less than their partner. Of course, protections would also help those who have been in controlling and abusive relationships where perhaps a partner has not allowed them to work or dominated financial management. By offering cohabitants a potential pension sharing option on separation, many would have a more financially secure future. The length of the relationship should be a significant consideration in any pension conversations, as well as how financially interdependent the couple was.
“However, there is a potential inconsistency in the suggested proposal. The Government suggests that maintenance payments (akin to spousal maintenance) would only be awarded in exceptional circumstances, for example where ill health or a disability made it necessary, and only for a defined period. In contrast, a pension sharing order may mean income is provided throughout retirement, directly contradicting the maintenance proposal.
“It is vital that the message is clear, and in plain English, should any reforms be introduced at a later stage. It should be clarified whether the purpose of pension sharing for separating cohabitants would be to meet a pension need or whether it be to recognise accrual from the duration of the relationship as both of these options could look significantly different.”
Are pension reforms likely?
The consultation closed on 14th August 2026. At present, the Government has given no indication of next steps. Whilst the consultation was open, there was a change of Government, which means priorities could have shifted, and any reforms could be many years off.
In the meantime, education and awareness is essential for both family lawyers and clients. Pensions should not be ignored when dividing assets on divorce, even if the parties decide to not progress to sharing.
Cohabitants currently have no rights to claim on their partner’s pension. Financial recourse is limited but understanding rights sooner rather than later can save time, money and emotional cost. Our family law experts deal with divorce and civil partnership dissolution as well as separation disputes between unmarried partners. To discuss your situation, get in touch.
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