Pension: what happens if my ex removes money from their pension before the order is implemented or does not cooperate with the implementation of a pension sharing order?
Pensions have been a hot topic in recent months, with the long-awaited budget changing the rules for employee contributions. From April 2029, the amount exempt from National Insurance contributions will be capped at £2,000 a year. You or your ex may choose to divert some of your salary over the next three years to make the most of this tax incentive to bolster your pension. In England and Wales, all pension assets that are built up during the marriage are taken into account on divorce.
Pensions are often one of the most significant assets for separating couples, after the family home. In fact, pensions are often amongst the most valuable asset in a divorce or dissolution. Even if pension assets were built up during the marriage, the Court will consider the entirety of the pension assets when assessing a fair distribution of assets to meet needs.
Ensuring your pension rights are secure after your separation is extremely important. Many people do not realise that an ex can technically access or draw down from their pension before a pension sharing order is implemented, and when it happens, the financial consequences can be serious. There are legal routes to address this, and acting quickly can make a huge difference.
A pension sharing order is a formal court order required for the division of pension assets, and it cannot be implemented by pension providers without this court order. All joint assets, including pensions, are considered in the financial settlement as part of the overall divorce settlement involving other assets and other marital assets.
What is a pension sharing order
When you divorce, there are several approaches to dividing pension assets. One of the most common is a pension sharing order. A pension sharing order is a formal court order required to divide pension assets, and it can apply to a range of pension schemes, including registered pension schemes, occupational pension schemes, personal pensions, and retirement annuity contracts. Please see our article here; “How International Pensions Are Divided Upon Divorce” for more information about the other options for dividing pensions.
A pension sharing order provides one spouse with a percentage share (also known as a pension credit) of their ex’s pension pot. The final order should set out:
- the percentage of pension to be transferred to you; and
- include wording that your ex should not intentionally claim, draw down, transfer or deal with the pension before implementation of the order.
When does the pension sharing order need to be implemented by?
The implementation period for pension sharing orders is up to four months beginning with the later of the day on which the order takes effect (either from the date of final order in divorce proceedings or 28 days from the date of the order) or the first day the pension trustees receive all the necessary documents.
During the implementation period, the pension provider must transfer the pension share into a new or existing pension scheme, which may include the original pension scheme, depending on the recipient’s preference and scheme rules. Most pension schemes charge implementation fees for pension sharing orders, typically ranging from £300 to £1,500. The implementation period is generally four months from the date the order is received by the pension provider, although some providers may complete the process more quickly in straightforward cases.
What if my ex removes money before the order is implemented?
Pensions are a complex area of law. If your ex removes money from their pension before the order takes effect, correcting the issue becomes complicated.
Each case is unique, however one route to rectify the problem is to apply to court to set aside the order pursuant to the “Thwaite” jurisdiction. In exceptional circumstances, the court could exercise this jurisdiction if an order has not yet been implemented or it has only been partly implemented. In the recent case of AP v TP [2025] EWHC 190(b) the court exercised its jurisdiction under Thwaite to set aside a pension sharing order after the final divorce order had been pronounced, in circumstances where the wife refused to cooperate with the pension sharing order’s implementation and the husband could not retire without access to the pension funds.
Alternatively, if the court cannot set aside the order, you may be able to seek a lump sum to compensate you for the loss caused by the withdrawal. Whether this is appropriate will depend on the type of pension involved, the extent of the loss, and the overall financial circumstances of the case. It is also important to note that even if a lump sum is awarded, you may not be able to pay it back into a pension in full without triggering tax charges or breaching pension contribution limits. For this reason, you should seek specialist legal advice before taking any action, to ensure you understand the most effective and tax-efficient way to resolve the issue. For complex pensions, it may be necessary to appoint a Pension on Divorce Expert (PODE) or actuary to assist with valuation to ensure a fair outcome. Legal representation is crucial in navigating the court process and protecting your interests during proceedings related to a pension sharing order.
Why Early Legal Advice Matters
The longer the delay, the more complicated the problem becomes. Pension schemes have different rules, and the financial impact can snowball if not addressed promptly.
How can Edwards Family Law help?
As a boutique family law practice, Edwards Family Law has a lot of experience dealing with complex pension sharing orders, including resolving issues when someone transfers money out before implementation.