When you go to Court, you and your ex-partner can choose how to split any pension benefits:
Pension sharing – This means that the pension benefits are split when you separate, allowing a clean break. You each receive a separate pension pot and can continue to build pension benefits for the future.
Your ex-partner’s share is called a ‘pension credit’. When we come to work out your pension, it won’t include the pension credit part your ex-partner received. If you transfer your pension out of the LGPS, your transfer value will be reduced due to the pension credit awarded to your ex-partner.
Pension offsetting – This is where you each keep your own pension benefits but adjust other assets to allow for the value of the pension. For example, you might keep your pension, and your ex-partner could get a larger share of the value of any property.
Pension earmarking – This means that when you start receiving your pension benefits, part of them will be payable to your ex-partner. It could apply to any lump sum you are due, as well as pension. Earmarking is rare, because it means your ex-partner will only receive their share of the benefits when you retire or die.
If your ex-partner remarries or starts a new civil partnership, their payments would stop and you would receive your full pension amount again.
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.
If part of your pension has gone to your ex-partner as a pension credit, the lower value of your benefits will count towards the lump sum allowances that apply to your benefits.
However, when measuring your benefits against the annual allowance, the pension credit is ignored in the year that the pension sharing order first applies.
You can find out more about these allowances in the Tax and pensions section.
If a pension sharing order applies to your LGPS benefits and you:
- remarry
- enter into a new civil partnership, or
- move in with a co-habiting partner
Any partner’s pension payable following your death will also be reduced.
If your new relationship ends, the Court can reduce your pension further. However, it cannot change the way the pension is already split. In other words, it cannot apply a pension sharing order to an earmarked pension, nor an earmarking order to a shared pension.
When your divorce or dissolution of a civil partnership is complete:
- Your ex-partner will no longer receive a partner’s pension if you die before them.
- If you told us that you would like your ex-partner to receive some or all of any death grant, this will still happen unless you change it. You can do this by completing a new expression of wish form.
- Any children’s pensions will still be payable – the separation does not affect them.