Till death do us part? Divorce doesn’t always end pension confusion

More divorcing couples are turning to the courts to resolve financial disputes, amid growing concern over long-term financial security and the rising cost of living.

Recent Ministry of Justice figures show applications for financial remedy orders reached their highest level in 15 years during 2025, despite overall divorce numbers falling. The figures show there were 49,067 applications for a financial remedy in the family courts in 2025, the highest since 2010 when 51,681 applications were made.

Family law specialists say the trend reflects increasing anxiety about future finances, with pensions becoming one of the most significant – and often most misunderstood – assets in many settlements.

“People are understandably far more focused on financial security than they may have been,” said Shannen Roberts, a family law specialist with Ashtons Legal LLP. “And for many couples, pensions may represent a higher long-term value than the family home. But too often we find spouses are unaware of the importance of pensions within a divorce settlement, and there’s frequent confusion about what might happen without a formal agreement.”

One common misconception is that an ex-spouse may benefit from a former partner’s pension and that this may continue after they die, but without any formal order in place this is unlikely, as after divorce they will no longer be the ‘widow’ or ‘widower’.

To protect future income post-divorce, the most common arrangement in England and Wales is a pension sharing order, which creates a clean break between the parties that mirrors the ending of the marriage.

A percentage of one person’s pension is transferred into a separate pension pot in the name of the ex-spouse. From that point onwards, each person has their own independent pension provision.

“That separation is important,” Shannen explains. “Once a pension sharing order has been implemented, the financial ties have been cut, and the ex-spouse knows they can rely on the pension pot they received as part of the divorce settlement.”

Older arrangements, known as pension attachment or earmarking orders, can work differently. Under these, the ex-spouse may receive a portion of pension benefits as and when they are paid out, maintaining a financial connection between the former spouses.

This sort of connection can become particularly important in the years after divorce, especially where circumstances change, people remarry, or estate planning comes into focus.

In these arrangements, death benefits may still be payable to the ex-spouse, but only if specified in the formal agreement.

Another potential problem arises if death occurs before a pension sharing order is fully implemented, which may mean the pension share never takes effect, leaving the surviving spouse facing unexpected challenges.

Legal experts say the rise in financial remedy applications also highlights the risks of informal arrangements or attempts to resolve complex financial matters without proper advice.

While no-fault divorce has simplified the process of ending a marriage, it does not automatically put an end to financial claims between spouses. Without a formal financial order approved by the court, claims may be brought even after the divorce itself has been finalised.

“There can be a temptation to deal with matters informally to save time or legal costs,” says Shannen. “But where pensions and long-term financial security are concerned, it’s vital to get independent advice and have matters agreed formally and laid down in a financial consent order that will be reviewed and signed off by the court.

“Understanding exactly what has, and has not, been agreed will help avoid confusion and disputes later on.”

With economic pressures continuing to shape how couples approach separation, ensuring pension arrangements are properly understood and documented is likely to become an increasingly important part of the divorce process.

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