English pensions and international divorce

What happens to english pensions in an overseas divorce?

A rising number of families are choosing to spend time in different countries after periods of time living and working in England and Wales. In many situations, people will accrue considerable pension funds from their employment in the UK before moving abroad, and leave their English pensions in the jurisdiction for tax and financial planning reasons. 

However, what many couples separating abroad are unaware of is that English pension providers cannot implement pension orders issued by foreign courts; in order for an English pension to be divided, an order must be obtained from a court in England and Wales. 

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Sharing english pensions on divorce

English pensions can only be divided and distributed upon divorce by the courts in England and Wales. In order to request the court to do this, couples who have divorced abroad must have their foreign divorce recognised in this jurisdiction. 

Once a divorce has been finalised abroad, an application may be made under Part III of the Matrimonial and Family Proceedings Act 1984, which enables the court to make further financial provision following an overseas financial settlement. However, for this to be successful, the English court must have jurisdiction. Jurisdiction can be established if the applicant has not remarried, the applicant has a sufficient connection to England and Wales, and at least one of the parties is:

• Domiciled on the date of either the application or the date of the overseas divorce; or
• Habitually resident in England and Wales throughout the period of one year ending with the date of the application or the date of the overseas divorce; or
• At the date of the application, has beneficial interest in a property in England or Wales, which was at some time during the marriage a matrimonial home of the parties to the marriage.

Therefore, simply having a pension in England and Wales will not necessarily mean that you can obtain a pension order from the English and Welsh courts.

For anyone looking to divorce while living abroad, it is crucial to seek legal advice in both jurisdictions in order to make informed decisions about which country should handle the divorce and the financial settlement that can be achieved in that country, before any decision is made about how to proceed.  

Consideration will need to be given as to where assets and pensions are located, the parties’ connections to England and Wales, whether English pensions may be shared and by which court, or whether alternative options such as pension offsetting should be considered. 

Frequently asked questions

Can I claim a share of my spouse’s UK pension if we divorced abroad?

Yes, even after a foreign divorce it is possible to claim a share of your spouse’s English pension. However you will need an order made in England and Wales to do so. This is typically done through an application under Part III of the Matrimonial and Family Proceedings Act 1984, which allows the English courts to make financial orders, including pension sharing, following an overseas divorce.

Can foreign courts make orders for English pensions?

No, foreign courts generally cannot make binding orders over English pensions. To implement any kind of division or sharing of pensions upon an overseas divorce, you will need to seek an order from the courts in England and Wales.

What are the requirements to bring a Part III claim in England?

As discussed above, in order to bring a Part III claim, parties must establish that they have a substantial connection to England and Wales and their divorce overseas must be legally recognised in this jurisdiction. 

Furthermore, a party must seek the court’s permission to bring the claim, which the court will not grant unless it considers there is ‘substantial ground’ for making an application. Permission to bring a claim should be sought within a reasonable time from the foreign divorce being granted.

Are there alternatives to pension sharing?

Pension sharing orders are common in England and Wales as they provide a ‘clean break’ for the parties. A pension sharing order transfers a lump sum from one party’s pension, to the other’s. From then on, each party will have their own separate pensions, and will not benefit from the other’s pension contributions post-divorce. 

However, there are other options available when pension sharing is not possible or less desirable, such as:

• Pension attachment orders - the pension provider directly pays a party’s former spouse a specific share of their pension, as determined by the court.
• Pension offsetting - instead of sharing a party’s pension, the value of the pension is ‘offset’ by providing their former spouse with a larger share of other assets.