International divorce: Understanding the impact on English pensions
Navigating an international divorce can bring unexpected challenges, especially when dealing with pensions tied to England. Pensions are often a significant marital asset, and overlooking their treatment during divorce settlements can lead to severe financial consequences for one party.
Why pensions pose challenges in an international divorce
Pension laws and practices vary significantly between countries. For example, some jurisdictions recognise and implement overseas court orders related to pensions on divorce, while others allow pension sharing through agreements rather than requiring a court order. English pension schemes, however, can be particularly inflexible. In most cases, they will not honour a pension sharing order or agreement made by a foreign court.
This issue becomes more pronounced in international divorces as global careers often lead individuals to accumulate pensions in multiple countries. Many people assume that an overseas divorce agreement or order will apply universally, only to discover that English pension schemes won’t comply.
Legal relief under English law for international divorce cases
English law provides a mechanism for addressing pension-related issues in international divorces. Under Part III of the Matrimonial and Family Proceedings Act 1984, individuals can apply for financial relief in England after a divorce overseas, including seeking a pension sharing order. However, eligibility requires demonstrating a sufficient connection to England.
Since Brexit, these rules have become more stringent. At least one party must either be domiciled in England and Wales or have lived in the country for at least a year at the time of the English application or foreign divorce. If a couple fails to meet these criteria they will be unable to make an application and will need to look at more creative solutions.
Alternatives to pension sharing in international divorce settlements
When direct pension sharing is not an option, other approaches may be explored, such as:
- Offsetting pension value: The value of the pension can be offset against other marital assets. This approach requires precise calculations by a specialist, as pensions often hold complex, long-term financial value.
- Deferred payment: The pension holder may agree to make payments from their pension income to their ex-spouse upon retirement, perhaps supplemented by interim maintenance. While feasible, this arrangement may be less appealing for younger individuals with many years until retirement.
The way forward
Legal practitioners continue to lobby for reforms to simplify the process for English citizens involved in international divorces where there are English pensions. However, as it stands, many remain unable to share pensions held in England, leaving their former spouses potentially at a financial disadvantage unless creative solutions can be found.
Whatever your situation, seeking early advice from an experienced family law solicitor is crucial. They can help you determine the most beneficial approach, bearing in mind the other country involved. If you’ve already gone through an international divorce and your pension related order isn’t recognised in England, they can explore your entitlements and advise on alternative remedies.
How we can help
Family law specialist Ellie Foster has extensive experience assisting clients with cross-border pension disputes and helping divorcing couples achieve equitable outcomes.
For tailored advice and support, call Ellie on 01423 851 112 or email ku.oc1742508365.fcl@1742508365retso1742508365fe1742508365.
