If you are going through a divorce and one of you holds a UK pension, the rules are probably more complicated than you expected. For expats, living abroad or having assets in multiple countries adds another layer of confusion. Pension sharing is one of the most frequently misunderstood areas of English and Welsh family law, and getting it wrong can be costly.

UK Pensions Require a UK Court Order

The single most common mistake expats make is assuming a divorce finalised abroad will automatically deal with a UK pension. It will not.

Pension sharing orders in England and Wales can only be made by a UK court. Even if your overseas divorce is legally recognised here, a foreign court has no power to instruct a UK pension provider to split or transfer a pension. This applies regardless of where you currently live, whether that is Dubai, Australia, the United States, or Spain.

Similarly, Section 12 of the Matrimonial and Family Proceedings Act 1984 allows financial applications to be made in England and Wales following an overseas divorce, if there is a sufficient connection to this jurisdiction. A UK pension is enough to establish that connection.

The Three Ways Pensions Are Dealt With

It helps to understand the three main options available under UK law.

Pension sharing transfers a percentage of one person’s pension into a new arrangement in the other person’s name. It provides a clean financial break and is the preferred option where the pension is a significant asset.

Pension offsetting means one person keeps the pension while the other receives a larger share of a different asset, such as the family home. This avoids a formal pension order but requires careful valuation. A property and a pension are very different types of asset, and getting the balance wrong can leave one party worse off in retirement.

Pension attachment (sometimes called earmarking) redirects a portion of pension payments to the other spouse when the pension comes into payment. It does not create an independent pension and ends on the death of the pension holder or if the recipient remarries. Most people consider it the least desirable option.

Why You Need a Pension Report

Courts require pension valuations as part of any financial settlement. The starting point is usually the Cash Equivalent Transfer Value (CETV), provided by the pension company. However, CETVs can be misleading, particularly for defined benefit (final salary) pensions, where the CETV may significantly understate the true value.

A report from a Pension on Divorce Expert (PODE) can give a much clearer picture, including what percentage share would produce fair retirement incomes for both parties. If you have agreed a settlement based on a CETV alone, it is worth pausing to check whether that figure truly reflects what the pension is worth.

Common Mistakes Expats Make

Relying on an informal agreement. Verbal or written agreements between parties have no legal standing in England and Wales unless recorded in a court-approved consent order. Without one, either party can return to court to make financial claims years later, even after the divorce is long settled.

Assuming the overseas divorce covers everything. A foreign divorce may be recognised in the UK, but that recognition does not extend to financial terms. UK courts can still deal with pensions and other assets separately.

Applying different cultural expectations. In some countries, pensions are not treated as marital assets at all. In others, all assets are split equally. English and Welsh law does neither. Courts apply a fairness test under Section 25 of the Matrimonial Causes Act 1973, weighing factors such as financial need, length of marriage, and each person’s contributions. A pension built up largely before the marriage may be treated differently from one accumulated entirely during it.

Undervaluing deferred pensions. Expats who worked in the UK earlier in their career have small deferred pensions they have forgotten about. Some of these, particularly defined benefit schemes, can be worth considerably more than they appear on paper.

How Mediation Can Help

Many informal agreements go wrong because couples try to resolve financial matters without any professional structure. Family mediation offers a constructive alternative. A trained, impartial mediator helps both parties identify assets, consider options, and work towards an agreement, without the cost and conflict of litigation. Online mediation sessions remove the barrier of distance, which is useful for couples living in different countries.

Mediation does not produce a legally binding outcome on its own. Any agreement reached still needs to be recorded in a court-approved consent order to have legal force.

Making It Legally Binding

The final step in any financial settlement involving a pension is a consent order, submitted to and approved by a court. A judge reviews the terms to check they are fair, even where both parties agree. For pension sharing specifically, the order must include a pension sharing annex naming the pension, the provider, and the percentage to be transferred. Once approved, it is served on the pension provider, who then implements the split.

Without this step, no agreement, however carefully negotiated, offers real legal protection.

Practical Steps for Expats

• Obtain the CETV from each pension provider as a starting point.
• Consider a PODE report for any defined benefit pension.
• Take independent legal advice from a solicitor practising in England and Wales.
• Explore mediation as an alternative to court proceedings.
• Ensure any agreement is recorded in a court-approved consent order.
• Do not assume a foreign divorce settlement covers UK pensions. It almost certainly does not.

This article provides general information about family law in England and Wales only and does not constitute legal advice. If you are dealing with a UK pension as part of an international divorce, speaking with a specialist family solicitor can be a helpful first step.