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Was Keeping The House The Best Deal After All?


In a divorce settlement, there are three separate ways to deal with a pension:

1) Offsetting

The most popular way is offsetting – the whole pension is kept by one party (typically the husband) and the other party (typically the wife) gets assets to an equivalent sum, usually the former marital home.

Superficially, this may seem like a fair split, however this approach does not usually take into account the changing values of a pension.

If the pension increases in value after the date of settlement, ‘offsetting’ may not provide an equal split in the long term.

In understanding the other types of pension settlements available, it becomes clearer why offsetting might not be the best financial advice during a divorce settlement.

2) Pension Sharing Order

A Pension Sharing Order creates a separate fund for the spouse who doesn’t own the pension. This separate fund doesn’t die if the original pension holder dies or remarries. This separate fund has to be created within 4 months of the order.

3) Pension Attachment Order

A Pension Attachment Order (which can also be referred to as ‘Earmarking’) doesn’t create a separate fund in the spouse’s name - instead, once the original pension holder starts to draw retirement benefits an agreed amount is paid to the ex-partner. There are some limitations to  this kind of arrangement. The ex-partner can only use the pension when the original pension holder draws down on it and if the original pension  holder dies or remarries then the attachment to the pension ceases.

Claims for negligence

Unfortunately, there are cases when pension division isn’t fully fair and has led to substantial under settlements for the spouse who doesn’t hold the pension.

In circumstances when this situation has arisen on the advice or omission of the solicitor acting for the spouse, then that solicitor’s advice may be negligent.

In these circumstances, the spouse can look to sue their former lawyers for professional negligence to recover the sums that they would have received had the pension been properly considered.

We can help To be able to understand fully if you were incorrectly advised and might have a viable claim arising out of your divorce settlement, contact a member of our specialist team on 0117 926 4121 or make a free online enquiry.