UK Pension Sharing Orders on Divorce (2026/27)
How a pension sharing order splits a pension on divorce in 2026/27: valuation, pension debits and credits, public sector schemes, offsetting and tax.
How a pension sharing order works: valuation, pension debits and credits, public sector schemes, the alternatives and tax. The process described is for England and Wales; Scotland and Northern Ireland have their own procedures. This is general information, not legal advice.
Pension sharing order process
- Divorce or dissolution application and financial proceedings
- Ask each pension scheme for a cash equivalent valuation
- Negotiate the financial settlement, which may include a pension sharing order
- The court makes the order, which cannot take effect until the divorce order has been made final (Matrimonial Causes Act 1973 s.24B(2))
- The scheme receives the order, the divorce order and the required information
- The scheme implements the pension credit within 4 months (Welfare Reform and Pensions Act 1999 s.34)
- The recipient holds pension rights in their own name
How different schemes value and pay the share
| Scheme type | Valuation | Where the credit goes |
|---|---|---|
| Defined contribution (workplace or SIPP) | Broadly the pot value | Usually your own scheme, or rights in the same scheme |
| Funded defined benefit (private sector, LGPS) | Actuarial cash equivalent | Rights in the scheme or a transfer, depending on the scheme |
| Unfunded public service (NHS, Teachers, Civil Service) | Actuarial cash equivalent | Rights in the same scheme only |
Sharing or offsetting
A pension sharing order is often considered when:
- The pensions are a large part of the couple's assets
- Both people need retirement income of their own
- A clean break is wanted
Offsetting is often considered when:
- One person needs capital now, for example for housing
- The pension is small relative to other assets
- Both agree how to compare the pension with other assets
Related pages
Frequently asked questions
What is a pension sharing order?
A court order made as part of the financial settlement on divorce or dissolution of a civil partnership that gives one person a percentage of the value of the other's pension rights. That amount must be used to give the recipient pension benefits in their own name (HMRC PTM029000). In Scotland the same result can be reached by a legally binding agreement rather than a court order. The mechanics are in Part IV of the Welfare Reform and Pensions Act 1999.
How is the pension valued?
The scheme works out the cash equivalent of the member's rights on the valuation day, and the order specifies the percentage to be transferred (Welfare Reform and Pensions Act 1999 s.29). For a defined contribution pot that is broadly the pot value. For a defined benefit scheme it is an actuarial value of the promised benefits, so two pensions with similar cash equivalents can provide very different incomes. Specialist pension advice on the figures is common in larger cases.
What are a pension debit and a pension credit?
When the order is implemented, the member's rights are reduced by the shared amount, known as the pension debit, and the ex-spouse or former civil partner receives rights of the same cash equivalent value, known as the pension credit. If the member's pension was already being paid, the ongoing pension is reduced. A pension credit does not count towards the recipient's annual allowance (PTM029000).
Can the share be moved to my own pension?
It depends on the scheme. A funded scheme can usually either give you membership rights in the same scheme or transfer the credit to another scheme such as your own personal pension. Unfunded public service schemes, such as the NHS, Teachers' and Civil Service schemes, can discharge the credit only by giving you rights in that scheme (Welfare Reform and Pensions Act 1999 Schedule 5).
How does a pension sharing order differ from attachment or offsetting?
A pension sharing order splits the pension now, so each person has their own rights and a clean break. An attachment order (earmarking) instead directs part of the member's pension or lump sum to the ex-spouse when it is paid, so it stays tied to the member. Offsetting means one person keeps the pension and the other takes a larger share of other assets, such as the home; it needs care because a pound of pension and a pound of other assets are not worth the same.
How long does implementation take?
Once the order takes effect and the scheme has the required documents and information, it has a 4-month implementation period to put the pension credit in place (Welfare Reform and Pensions Act 1999 s.34). How long the whole process takes before that depends on the court timetable and how quickly the scheme provides valuations.
Can a State Pension be shared?
Sometimes. GOV.UK says a financial agreement on divorce can include a share of your partner's pension, including State Pension, and the Matrimonial Causes Act 1973 s.24B lets the court make a pension sharing order over "shareable state scheme rights". Which parts of a State Pension can be shared depends on the type of State Pension and when the person reached State Pension age, so check with the Pension Service or a family law adviser before relying on it.
Is there tax to pay when a pension is shared?
Sharing the pension moves rights between the two of you inside the pension system rather than paying money out, so the pension credit is not counted towards the recipient's annual allowance. Income Tax applies in the normal way when either of you later takes benefits. If the shared rights were already in payment, the recipient cannot take a tax-free lump sum from the pension credit (PTM029000).