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Overseas pensions: Important considerations for pension sharing on divorce/dissolution in England and Wales

Our family law experts outline the options that separating couples have to share an overseas pension when divorcing in England or Wales.

The Office of National Statistics reported in 2022 that 42% of the wealth held by households in Great Britain is held in pensions. They can take many different forms — public sector, defined benefit, defined contribution/money purchase, SIPPs, SSAS, to name but a few UK based schemes, not forgetting the state pension. They may be UK based, or elsewhere.

As we have explored in a separate article, overseas assets can cause a headache when a relationship breaks down, and that is particularly so with overseas pensions that may be been generated when one or both members of a couple lived or worked abroad.

Legal (and financial) advice is crucial to secure the best legal strategy for reaching a fair financial settlement if a marriage or civil partnership comes to an end. Unfortunately unmarried partners cannot claim a share of their partner’s pensions.

Overseas assets

As explained in our separate article, there is no guarantee that a court will be able to make orders in relation to assets held outside of its jurisdiction. It is crucial to take advice on this issue before deciding where the divorce takes place. If an asset is held outside that jurisdiction, a court may not be able to deal with it at all — or if it does deal with it — one party finds that they cannot enforce that order in the alternative jurisdiction if the other party defaults, as the overseas order has no ‘teeth’ there.

Expert lawyers help parties decide the pros and cons of choosing a jurisdiction for divorce/dissolution and also how best to help them ensure that a financial settlement does what it is intended to do, and can be enforced if necessary.

UK-based pensions

When a relationship breaks down, whether and how a court may deal with a pension as part of a financial settlement is an important consideration, particularly if a pension is a valuable asset for the family as the statistic above illustrates.

The family court in England and Wales has a wide discretion to make a fair and reasonable financial settlement on divorce or dissolution, and that includes the scope to make pension sharing (and less commonly pension attachment) orders over UK pensions.

A Pension Sharing Order takes a percentage from the pension fund of the wealthier pension holding party and transfers it into a pension fund belonging to the less wealthy pension holding party. The two pensions then stand alone and the parties are free to deal with them as they see fit, completely independently of the other party.

Overseas pensions

As pension provision differs significantly across the world, with different structures and rules peculiar to the jurisdiction where the pension is based, there is no common ground for how a pension is valued or what it comprises of.

The English court cannot make an order over a non-UK pension save for in very limited situations, and as such, if a divorce takes place, one party may be left in a situation where an overseas pension remains with one party when it could, and should, be shared fairly between them. This may to be the significant advantage — or disadvantage — of one party.

In this article, we explore the options that might be available if an overseas pension is held by one or both parties to a relationship.

Check the nature of the pension scheme

If the pension is held in an EFRBS (Employer Financial Retirement Benefits Scheme), held offshore, it may possibly be made the subject of an English/Welsh order. This is not true of every EFRBS. Even if it is possible, it may be fiscally imprudent to make an order. Expert advice is required from a specialist in overseas pensions.

Some non-UK residents hold a QROP (Qualifying Recognised Overseas Pension Scheme). These cannot be made the subject of a pension sharing order in England and Wales, even if a UK pension has previously been transferred into the scheme.

Orders in foreign jurisdiction

As we have seen with Part III of the Matrimonial and Family Proceedings Act 1984, it may be possible to secure an order in a different jurisdiction over an overseas pension, but this is by no means guaranteed, Expert legal advice in the jurisdiction where the pension is situated is critical to understand the potential options (or lack of them), as well as understanding the nature of the pension investment and rules applicable to the scheme. Does the foreign court recognise an English or Welsh order? Would it enforce it? Could a separate order be made in that jurisdiction? These are just some of the questions that should be asked.

Some international corporates have offshore trust schemes providing benefits in respect of overseas service, particularly for their senior employees, the rules for which mirror their onshore schemes. Accordingly, these may accept and implement pension sharing orders from English and Welsh courts. Before entering into an agreement in which a pension share against such a scheme forms a part, it is essential to ascertain that it will be enforceable. As with EFURBS, it may not be advisable in terms of tax efficiency to bring a pension credit onshore from such a scheme and expert pension and financial advice should be taken as to the appropriate receiving mechanism for such a fund, for example a QROP.

Other legal remedies

Other options may include:

Capital lump sum — in lieu of the pension. Is it possible to ‘offset’ the pension against other assets held by the family? This is complex but may be an option if the parties’ capital resources are sufficient.

Maintenance — could an order be made for ongoing maintenance instead?

Transfer of the overseas pension to a UK pension (or liquidate the overseas pension fund) — this would require specialist financial and legal advice, but it may be possible to transfer the overseas pension to the UK, where an English or Welsh order could be made.


Given the potential complexities, it is essential for parties to take legal advice at an early stage.

Our experience is that many parties are in agreement about the principle of sharing a pension, and simply need support to find a mechanism that works for them and their family. Other family disputes are less harmonious and in those circumstances it is essential to secure advice quickly before divorce or dissolution proceedings are issued.

For more information on jurisdictional issues with pensions on divorce or dissolution, contact our family lawyers.