Q: My husband and I have grown apart, but it suits him not to divorce. I haven’t worked since having the children, who are now grown up, so I don’t have a pension in my own right. If we did divorce, would I be entitled to a share of my husband’s pension? I believe he has a substantial private pension fund but I have always left financial matters to him.
A: This is seen as a problem by many wives in your position. However, where the husband has substantial pension provision and the wife does not, the wife has an entitlement to some form of compensation for her loss of pension rights. For example, your husband could transfer to you capital assets equivalent to your perceived share of his pension. Alternatively you might receive a proportion of any retirement lump sum he gets, or get maintenance payments from him for life.
As a result of legislation brought out in 2000 it is possible to divide a pension through a Pension Sharing Order. This means that at the time of the divorce a wife can transfer out a portion of her husband’s pension scheme into a scheme of her own. It is not however always straightforward, especially in the case of a Small Self Administered Scheme (SSAS) which is designed to provide the director(s) of a private company with a pension fund, whilst simultaneously allowing the assets of the fund to be invested in or used by the business. In such cases it is not unusual for both the director and his or her spouse to both be members of the scheme. To answer your question in short, yes, you would have some entitlement – but you would need to seek expert advice based on your particular circumstances.