Divorce can create financial difficulties. The pensions of both parties in a divorce may be considered when the court decides what money goes where. If one spouse never worked, while the other built up a large pension fund, this will have to be taken into account and the calculations can be complex.

There are a number of factors to consider when handling the division of pension rights in a divorce. From April 2009, the restrictions imposed on people who receive part of their ex-partner’s pension benefits were scrapped.

The rule change makes it more attractive now to use pension sharing as part of a divorce settlement. Courts can also earmark one partner’s pension. This means that when the pension finally pays out, in 20 years or so, part of the pension is reserved for the other partner. The problem with this system is that, having divorced your husband or wife, you then have to wait for them to retire before you receive any money. If they choose to retire late, you have to wait longer. And if they die before retirement you could be left with nothing. However, depending upon the scheme type, the benefits could be worth much more.