Armed forces pension on divorce
On divorce or the dissolution of a civil partnership, an armed forces pension is usually one of the most valuable assets to divide, often worth more than the family home. The courts can split it in three different ways, and the figure they work from is the cash equivalent value of the benefits you have built up. This guide explains how a pension sharing order works on AFPS 75, 05 and 15, where the valuation comes from, and the steps to take, though the order itself is a legal process for a family-law solicitor, not something this site can decide for you.
Key takeaways
- A pension is a marital asset; the court works from the cash equivalent value (CEV) of your AFPS benefits.
- There are three routes: a pension sharing order, pension offsetting, or pension attachment (earmarking).
- A pension sharing order gives your ex-partner a percentage of the CEV as a pension credit, usually held inside AFPS.
- Your own pension is reduced by a matching pension debit for the rest of your life.
- Veterans UK provides the official cash equivalent value on request; this calculator gives a rough guide only.
- Pension on divorce is a legal and financial decision, so a family-law solicitor and regulated advice are worth having.
What happens to a forces pension on divorce
A pension built up during a career is treated by the courts as a marital asset, in the same way as savings or property, and it has to be taken into account when finances are settled. Armed forces pensions are often the single largest asset in the marriage, precisely because they are generous and index-linked, so they rarely get left out of a settlement.
The starting point for any split is a valuation. For armed forces schemes that figure is the cash equivalent value (CEV), sometimes called the cash equivalent transfer value, which puts a single capital figure on the benefits you have earned. Veterans UK provides this on request, and it is the number a solicitor and the court will work from rather than any estimate.
The three ways a pension can be divided
The cleanest and now most common route is a pension sharing order. The court orders a percentage of the cash equivalent value to be moved from one party to the other, giving each a clean break with their own pension provision from the date of the order.
The two alternatives are offsetting and attachment. Offsetting keeps the pension whole but balances its value against other assets, so one party might keep more of the house in exchange for the other keeping the pension. Attachment, or earmarking, leaves the pension in the member's name but directs part of it to the former spouse when it is eventually paid, which keeps the parties financially linked and is used far less often now that sharing is available.
How a pension sharing order works on AFPS
Under a pension sharing order the court fixes a percentage of the cash equivalent value to transfer. That share becomes a pension credit for the receiving party and an equal pension debit against the member, so the member's own AFPS pension is permanently reduced by that amount for the rest of their life.
Because the armed forces schemes are unfunded public-service schemes, the pension credit is normally held inside the AFPS rather than transferred out to a personal pension. The receiving party becomes a pension credit member with their own benefits in the scheme, payable to them in their own right at the scheme's pension age. The exact mechanics depend on the scheme and the date of the order, so the figures must come from Veterans UK.
What to do next
Start by requesting the cash equivalent value from Veterans UK, because nothing can be settled without it, and use the calculator here only to get a feel for the scale of the pension while you wait. Pension on divorce is one of the areas where an estimate is least reliable, since the split depends on the official CEV and on how the wider settlement is balanced.
Then take proper advice. A family-law solicitor handles the order itself, and for a pension of any size a regulated financial adviser or an actuary can check that the percentage being shared is fair once tax and the different pension ages are taken into account. This site is independent, is not affiliated with the MOD or Veterans UK, and provides general information rather than legal or regulated financial advice.
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Frequently asked questions
James Hartley
James Hartley spent 22 years in the British Army, including unit personnel administration and pensions and records duties, and now writes the scheme guides and scenario pages on this site. He is not a regulated financial adviser, so the content is general information rather than personal advice.
Sources: gov.uk · GAD factors · Veterans UK · Forces Pension Society · MoneyHelper.