If you get divorced or dissolve a civil partnership, the Court will take your the value of your pension into account when determining any settlement.
You and your ex-spouse or partner will each need to tell the Court the value of your pension pot(s) and/or the value of the benefits you have built up. You don’t have an automatic right to know the value of your ex-spouse’s or partner’s benefits, and vice versa but you can each decide to tell each other. Contact your pension fund to request the information you need.
If you live in England, Wales or Northern Ireland, it is the value of your pension benefits at the date of divorce or dissolution of the civil partnership that is counted.
If you live in Scotland, it’s the increase in the value of your pension benefits over the course of the marriage or civil partnership that is counted. This means that pensions should be valued at the date of separation.
When you go to Court, you and your ex-spouse or partner can decide how any pension benefits are split:
Pension sharing – the pension is split at the time of divorce or dissolution. You each receive a separate pension pot and can continue to build pension benefits for the future
Pension offsetting – you each keep your own pension benefits but adjust the proportion of other assets to take account of the value of the pension benefits. For example, you could keep your pension, and your ex-spouse or ex-civil partner could get a larger share of the value of the house.
Pension earmarking – arranging that when one person’s pension benefits start to be drawn down, part of them will be paid to the other person.
You may wish to get legal advice from your solicitor on how to deal with your LGPS benefits during any divorce or dissolution of a civil partnership.
You can find out more about pension sharing and earmarking in the other FAQs in this section.
You will need specific information about your LGPS benefits as part of the proceedings for a divorce, judicial separation or nullity of marriage, or for dissolution, separation or nullity of a civil partnership. You or your solicitor should contact your pension fund for this information, including an estimate of the cash equivalent value of your pension rights. The Court will take this value into account in your settlement. In Scotland, only the pension rights built up during your marriage or civil partnership are taken into account.
You usually get one free cash equivalent value estimate each year. Any other costs for supplying information or complying with a Court Order will be recovered from you and/or your ex-spouse or ex-civil partner. You can ask your pension fund for a schedule of charges.
All correspondence received by your pension fund in connection with divorce or dissolution proceedings will be acknowledged in writing. If you do not receive and acknowledgement, you should contact your pension fund to make sure your correspondence has been received.
If the Court makes an Earmarking Order, your LGPS benefits still belong to you, but some are earmarked for your ex-spouse or ex-civil partner. The earmarked benefits will be paid to your ex-spouse or ex-civil partner when your benefits are paid, reducing the amount paid to you.
The Order can require that your ex-spouse or ex-civil partner receive one or a combination of the following:
When earmarked benefits become payable, your pension fund will contact your ex-spouse or ex-civil partner to check that the Earmarking Order is still valid and arrange to pay the earmarked benefits.
You can transfer your benefits to another pension arrangement on leaving the LGPS, as long as your new pension provider can accept the Earmarking Order.
Earmarking has limitations and is not widely used. As the pension rights remain with you, your ex-spouse or ex-civil partner must wait for you to retire or die to receive the earmarked benefits. If your former spouse or civil partner remarries or enters into a new civil partnership, an Earmarking Order against pension payments would cease and the full pension would be restored to you. This would not affect any lump sums, unless the Order directs otherwise.
Pension payments to your former spouse or civil partner would stop on your death, although any earmarked lump sum death grant would then become payable to your ex-spouse or ex-civil partner.
If the Court issues a Pension Sharing Order, or your benefits are subject to a qualifying agreement in Scotland, part of your benefits are transferred to your ex-spouse’s or ex-civil partner.
Your ex-spouse or ex-civil partner will hold those benefits in their own right. This is known as a pension credit. You can find out more about pension credits by looking at the pension credit FAQs.
Your pension and any lump sum will be reduced by the amount allocated to your ex-spouse or ex-civil partner at the point of divorce/dissolution. The reduction is called a pension debit.
The value of the pension debit will increase each year in line with the cost of living between the date it applies from and the date your pension is paid. When you take your pension, the increased amount will be deducted from your pension benefits. The pension debit amount will be adjusted if you take your pension before or after your normal pension age.
You may wish to increase your pension to make up for the reduction following a pension share. You can find information on paying extra to increase your pension in the Paying more section.
If your LGPS pension is subject to a Pension Sharing Order, you can still transfer your remaining benefits to another pension arrangement. If you transfer within the LGPS, your new fund will reduce your benefits by the pension debit when you take your pension.
When you take your LGPS pension, its value will be assessed against the lifetime allowance. The lifetime allowance is the total value of pension savings that you can have before additional tax is payable. If your benefits are subject to a pension sharing order, the reduced value of your benefits after the pension debit has been deducted will be used.
The current lifetime allowance is £1,073,100. Most scheme members will not be affected by the lifetime allowance.
If you are a high earner affected by the lifetime allowance, a pension debit may affect any lifetime allowance protection you have.
Each year that you pay into the LGPS, the increase in the value of your benefits is measured against the annual allowance. The annual allowance is the maximum amount that your pension can increase by in a year before you have to pay extra tax. The reduction in your pension due to a pension debit is ignored in the year that the pension sharing order or qualifying agreement is applied to your benefits.
You can find out more about the lifetime and annual allowances in the Tax section.
If your LGPS benefits are subject to a pension sharing order and you:
any spouse’s pension, civil partner’s pension or eligible cohabiting partner’s pension payable following your death will also be reduced.
>If you remarry or enter into a new civil partnership and then divorce or dissolve your civil partnership again, your remaining pension rights can be subject to a further reduction. A pension sharing order cannot be issued if an earmarking order has already been issued against your LGPS pension. Similarly, an earmarking order cannot be issued if your pension benefits are already subject to a pension sharing order.
After your divorce or dissolution of a civil partnership is completed: