Pension sharing is expected to apply to all divorces for which proceedings begin after April 2000.

This system will mean that on divorce each ex-spouse will have a pension in their own right until they die.

Who will benefit?

This system will mainly benefit divorced women in the future.

Women tend to have lower pensions than men because they often spend less of their working lives in paid work.

They often have career breaks to have children and are therefore at a disadvantage in occupational pensions.

So pension sharing will benefit women more than the current earmarking system (see below).

Background

Until 1995, in England and Wales, the treatment of pensions when couples divorced was rather vague.

The Matrimonial Causes Act of 1973 allowed courts to take pensions into account in a divorce settlement, but they did not have to.

Even if the pension or pensions were taken into account when calculating a couples assets, there was no power to transfer part of a pension between spouses.

The last Conservative government was initially reluctant to do anything to change this position, but eventually responded to pressure particularly from women's groups, and as part of the Pensions Act 1995, introduced a system called 'earmarking.'

Earmarking

The Pensions Act 1995 stated that courts have a duty to consider the pension entitlement of both parties to the divorce.

More fundamentally, a Court Order can require trustees to -