When a marriage ends, most couples can put a value on the family home to within a few thousand pounds. Ask what their pensions are worth and the conversation usually stalls. It is an expensive silence.

Why later-life divorce changes the maths

Office for National Statistics figures show the average age at divorce in England and Wales has been creeping upwards for years and now sits in the mid-forties, while so-called silver splitters — couples parting in their sixties and beyond — have been a growing group for decades. The later in life a marriage ends, the more of a couple's wealth tends to sit in pension funds rather than bricks and mortar.

After the home, a pension is usually the largest asset a divorcing couple owns. For those separating after thirty years of work it can be the largest full stop. A final salary scheme built through a long career will comfortably outstrip the equity in many family homes, and research into wealthier divorcing couples has found more of their money held in pensions than in property. Long marriages also tend to be treated by the courts as full financial partnerships, so pensions built up over those years are firmly on the table, whichever spouse's name they happen to sit in.

The offsetting trap

Yet pensions are routinely traded away. A common arrangement sees one spouse keep the house while the other keeps their pension untouched, a deal known as offsetting. On paper it can look like an even swap, but the figures behind it are often misleading. The transfer value quoted on a pension statement, particularly for a final salary scheme, can seriously understate what those benefits would actually cost to replace. And a house, however reassuring, does not pay an income at 75 unless it is sold.

Women are especially exposed. Career breaks and part-time working leave many wives with far smaller pots than their husbands, and giving up a pension claim in order to stay in the family home can translate into real hardship twenty years later. Studies of retirement incomes consistently find divorced women approaching pension age with far less put aside than divorced men.

Value everything before you negotiate

A fair outcome starts with information. Every scheme should be valued, including old workplace pensions from jobs half-forgotten; providers will supply a cash equivalent transfer value on request. Old pots have a habit of going missing after house moves and career changes, and the government's free Pension Tracing Service can track down schemes from decades ago using little more than an employer's name. For final salary or otherwise complicated arrangements, a report from a pensions actuary is money well spent. Both spouses owe a duty of full financial disclosure during the process, and a settlement reached while a pension was quietly left off the list can be reopened later.

From there, the law in England and Wales allows pensions to be shared — one spouse receives a percentage of the other's fund as a pot in their own name — or offset against other assets, with a proper adjustment for the difference between pension money and cash in hand today.

No financial order, no protection

There is a catch that many couples miss: none of this happens automatically. Since no-fault divorce arrived in 2022 it has been straightforward to end a marriage online, but the final order dissolving the marriage does not settle the money. Without a separate financial order approved by the court, financial claims — pensions included — remain open indefinitely, and a pension sharing order cannot exist without one. Couples who agree terms between themselves do not need a courtroom battle to make it binding, because a consent order can be drawn up and approved by a judge on paper. Specialist guidance on how pensions are divided on divorce is worth seeking before anything is agreed, not afterwards.

One further wrinkle: the basic state pension cannot be shared at divorce, although it is worth checking whether an ex-spouse's National Insurance record improves your own entitlement.

Before you sign anything

None of this is an argument for fighting over every pound, and plenty of couples reach sensible agreements without going near a courtroom. The point is narrower. Before signing anything, know what every pension is actually worth, and have the final deal recorded in a financial order. It does not need to be adversarial, but it does need to be deliberate. The house is easy to argue over because everyone can see it. For anyone divorcing in the second half of life, it is usually the pension that determines how comfortable the years afterwards turn out to be.