As Pension Awareness Week begins, Ewa Sierawska considers how family lawyers can help clients compare present housing needs with future retirement security, recognise when apparently simple off-setting is misleading, and leave a clear record of an informed decision.
Pension Awareness Week is a useful reminder that this valuable asset is still too often pushed behind the family home when negotiating a divorce. In 2025, Legal & General reported that only 13% of divorcing couples considered pensions when dividing assets, with women more likely than men to waive rights to a partner’s pension.
Those figures are concerning, but for practitioners the issue is more nuanced than whether a pension sharing order was made.
Choosing to waive one’s pension rights may not be a decision which has been made on an informed basis. It may be that the individual did not fully understand the long-term implications of waiving those rights but was more concerned with addressing their immediate needs. However, the absence of a pension sharing order does not necessarily indicate a poor settlement outcome.
The individual could have chosen to offset any pension sharing claim against other capital assets available for distribution. The main question is whether the parties have been properly and sufficiently advised by a pensions on divorce expert (PoDE) to understand the implications of their decision.
Immediate needs can outweigh long-term security
In my experience, clients rarely approach divorce as a neutral asset-allocation exercise. Their immediate questions are practical: where will they and the children live, can they take over the mortgage, and how will they meet their other monthly outgoings?
A pension that cannot be used for many years can feel theoretical against the more immediate and pressing needs. Their focus is understandably on getting through the next few months.
That pressure can be particularly acute for a client who has reduced hours, taken career breaks or assumed most of the caring responsibilities for minor children. That same history may also create an urgent need for housing costs to be met, and may also have limited that person’s pension provision and future earning capacity.
Giving up a pension claim can therefore reinforce an inequality which the overall settlement ought to examine.
Offsetting effectively
The attraction of offsetting is obvious. It can allow one party to retain more equity in the home or a greater share of the available capital assets which are immediately available, while the other preserves their pension, avoiding the administrative consequences of pension sharing.
The danger lies in treating a cash equivalent value as though it were readily interchangeable with the same amount of property equity or cash.
Pensions and capital have different purposes, tax treatment and dates of availability. A defined pension providing a guaranteed income on retirement may not be comparable with a defined contribution fund carrying investment risk, even where the headline valuations look similar. Scheme features, guarantees and the cost of replacing lost retirement income also matter.
A simple arithmetic offset can therefore create an outcome which looks balanced on the schedule of assets but produces markedly different standards of living upon retirement.
The second edition of the Pensions Advisory Group’s Guide to the Treatment of Pensions on Divorce is an important reference point. It reinforces that the appropriate approach to pension sharing is case-specific and that expert evidence may be needed where reliable comparison cannot be made from the available information.
Proportionality matters, but so does recognising when apparent simplicity conceals a significant risk that the individual places themselves at a financial disadvantage for their future provision.
Knowing when specialist advice is needed
Clients can find it helpful if the consequences of their decisions are explained in terms that relate to their lives. A larger share of the home may solve the immediate problem, but what income will be available at retirement? Could the client rebuild the pension they are surrendering, given their age, earnings and caring responsibilities? What assumptions sit behind the proposed offset?Where the answer depends on specialist valuation or financial planning, the limits of the lawyer’s advice should be made clear and the appropriate expert input considered.
This is also an area where the written record matters. If a client chooses housing security over a pension claim after receiving advice, that choice may be rational, but they need to understand that any agreement reached is a final one and must take into consideration fairness as at today as well as in retirement.
The file should show the options explained, the limitations of the valuation, any recommendation for specialist advice and the client’s reasons for proceeding. If proceeding against advice a signed disclaimer is not a substitute for a detailed discussion, but a clear record helps demonstrate that the decision was informed should the client become disgruntled to find themselves with insufficient pension provision in the future.
A better measure of good practice
As a profession we should not measure success by the number of pension sharing orders made as they may simply not be appropriate in some cases. The better test is whether pensions were disclosed, understood, valued proportionately and considered alongside both immediate and future needs before the settlement was agreed.
Family lawyers cannot remove the economic pressures that make the client’s immediate needs their priority. We can, however, ensure that the long-term consequences are fully understood. The pension may remain the less shared asset, but it should never be the less examined one.
About the author
Ewa Sierawska is a family law solicitor at Parfitt Cresswell Solicitors and a member of Resolution. She advises on divorce and financial matters, children matters, cohabitation and domestic abuse.
The views expressed in this article are those of the author and not necessarily those of Today’s Family Lawyer.
