The number of court orders forcing divorcing couples to split their pensions has reached a record high, according to Collyer Bristow.
The private client law firm says that over the past year there has been a 43% rise in couples seeking to split one or more pensions as part of the divorce agreement. In 2016/2017 there were 11,503 pension sharing orders made by courts, up from 8,027 the year before.
This increase is despite overall divorce levels in the UK falling by 3% over the past year.
The rise has been attributed to the rising asset values of pensions, making it harder for the owner of the largest pension to offset an ex’s claim on it by making a cash payment in lieu.
Collyer Bristow says many divorcees want to avoid pension sharing because it adds additional administration costs and a reinvestment risk for the recipient of the money.
Toby Yerburgh, partner and head of the family team at Collyer Bristow, says: “Pension pots have been an obvious target for years – and their importance has kept growing. The bigger the value of these pension pots the more potential for arguments and misunderstandings there are.”
“With the average transfer value of final salary scheme being over £210,000 there is a lot at stake, especially amongst higher earners.”
He adds: “Traditionally, the holder of the bigger pension pot would make a cash payment to avoid the costs involved with splitting a pension. However, with many pensions becoming so valuable it can be nearly impossible to avoid cutting into them.”