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The Pension Advisory Group (PAG) and it's guide to the treatment of pensions in divorce settlements

View profile for Jasdeep Nagra
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The Pension Advisory Group (PAG) is an interdisciplinary group of judges, solicitors, barristers, legal academics, independent financial advisors, and actuaries. The group was set up in June 2017. The main objective was to provide a guide to practitioners, litigants and judges as to  the treatment of pensions in divorce settlements.

The first PAG guide was released in July 2019 and an updated version will be released in August 2023, herein referred to PAGv2.

PAGv2 is  set to introduce, by the Government, a Pension Dashboard Programme, which will enable individuals to view their various pensions in a single online platform. This will be beneficial, as I see quite a few clients struggle to remember the details of their pension providers, over the years. I have also been involved in cases, where either or both parties  have provided a CETV from a pension provider, late in the proceedings, because they ‘forgot’ they had that pension. So, I can imagine it will be a useful tool, when it comes into play.

There will be a requirement for  the parties and for the Court to ensure that a careful analysis is done of the S25 factors, including respective income and needs in retirement, before considering whether an apportionment of pension rights would be fair. If an apportionment is agreed, then it is likely that the guidance will be that there should be sharing of the pension rights accrued  from the date of cohabitation to the date of separation. However, there is some case law which  argues that there should be a 12-month extension beyond separation,  if accruals from income might be classed as ‘matrimonial.’

There will also be a new section on short marriages. This section will highlight that the Court may, in cases involving short marriages, make a decision based on ‘needs’ as to whether apportionment of pension rights is appropriate. 

PAGv2 will expand on the section regarding Home Responsibilities Protection for non-working partners, who may have not received enough National Insurance credits to qualify for a full state pension. There will also be additional sections on allowing National Insurance credits and Child Benefit credits to be allocated between spouses.

 This is merely a snapshot of the changes coming into effect within the new PAG report. There are other changes which may be relevant to you and your case. It would be my suggestion that you consider the proposed amendments carefully.

One thing to note is that the Courts will now take the approach that in some cases, pre-marital accrual will be seen as non-matrimonial assets (and therefore not shared with the other party). If the Courts start doing this with pensions, then who’s to say that in the future they won’t start doing it with other assets? I can see that if this aspect is successful, there will be arguments for properties, investments etc to be considered as non-matrimonial assets, which might otherwise have been shared 50/50.

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If you would like to speak to one of our experienced divorce solicitors with high level expertise in supporting people with pension queries during divorce, please do get in touch. Our team of highly qualified divorce solicitors will be able to assess your situation and guide you through any steps necessary.

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