Divorce Pension CETV Calculator — Pension Sharing vs Offsetting

A CETV is the cash value that a pension scheme places on an individual's pension rights — essentially what the pension is 'worth' if transferred out today. It's used in divorce proceedings to compare pension assets with other assets like property and savings. CETVs are requested from the pension provider.

A pension sharing order (PSO) is a court order that divides a pension between divorcing spouses. The non-member spouse receives a percentage of the pension's CETV, which is then either transferred to their own pension or to a new pension credit with the same scheme. PSOs are implemented once the divorce is finalised.

Pension offsetting means one spouse keeps their pension but the other spouse receives a greater share of other assets (like the family home) in compensation. The pension is valued using the CETV, and other assets are allocated to match this value. Offsetting avoids the cost and complexity of a pension sharing order.

It depends on each party's needs. Pension sharing gives the non-pension spouse their own pension provision for retirement. Pension offsetting gives immediate access to other assets (e.g., the home) but may leave the non-pension spouse underprotected for retirement. Professional advice is essential.

A PODE is an actuary or independent financial adviser specialising in pension valuations for divorce. They can assess whether a CETV fairly reflects the pension's value (particularly for defined benefit/final salary schemes, where CETVs may significantly understate the true value) and advise on appropriate sharing percentages.

Not always. For defined contribution pensions, the CETV is essentially the fund value. For defined benefit (final salary) pensions, the CETV is calculated by the scheme actuary using assumptions about discount rates and life expectancy that may produce a figure significantly below the economic value of the guaranteed income. A PODE analysis is crucial for DB pensions.

Costs include: solicitor fees for drafting the order (typically £500-£2,000), court fees (~£180), and pension scheme implementation charges (typically £1,000-£5,000 depending on the scheme). NHS, civil service, and other public sector schemes often charge £2,000-£4,000 for implementation.

Pension earmarking (also called attachment) directs a portion of pension payments to the ex-spouse when they are paid. It's less popular than sharing as it only pays when the member starts drawing and the order is cancelled if the member dies. Pension sharing is now the preferred method.

If the member dies before the order is implemented, the non-member spouse can usually still receive their share (the estate must implement it). If the non-member spouse dies after implementation but before drawing, the pension credit is treated as part of their estate. Get legal advice on death-before-implementation scenarios.

The State Pension cannot be shared in divorce proceedings (it cannot be transferred). However, Class 1 NI contributions can be shared following divorce through Pension Sharing on State Pension — applying when one spouse has more NI years than the other. This affects entitlement to the full State Pension.

After the final divorce order, the pension provider typically has 4 months to implement the sharing order. For public sector schemes, the timeline can be longer. The non-member spouse can only access their pension credit from the scheme's normal retirement age (or scheme rules), not immediately.

For DC pensions with moderate values, the CETV may be sufficient for negotiation. For DB pensions (public sector, final salary), a PODE report is strongly recommended as the CETV often significantly undervalues the pension. The difference between CETV and PODE valuation can be tens of thousands of pounds.