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.
It does not matter much whether you are still serving or already drawing the pension; what was built up during the marriage is in scope either way. The court looks at the whole financial picture, so the pension sits alongside the house, savings and any other assets rather than being judged on its own, and how it is treated depends as much on the rest of the settlement as on the pension itself.
The cash equivalent value and where it comes from
Everything turns on the cash equivalent value, because that single capital figure is what the court, the solicitors and any actuary all work from. It is the scheme's estimate of what your accrued benefits are worth today, expressed as one number, and for the armed forces schemes only Veterans UK can produce the official version. An estimate from a calculator is useful for getting your bearings, but it is not the figure a court will accept.
You request the cash equivalent value from Veterans UK, and it can take some weeks to come back, so it is worth asking for early in the process rather than at the last minute, in the same way you would request an armed forces pension forecast well before a decision deadline. The value reflects your scheme, your length of service and your age, and because the AFPS schemes are generous and index-linked, the number often surprises people with how large it is.
One cash equivalent value covers all your AFPS benefits, including any McCloud remedy position, which is part of why the official figure matters so much. A long career split across AFPS 75 or 05 and AFPS 15 produces a single combined value, but the way that value is made up affects how a share of it will actually pay out, which is the next thing to understand.
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.
Which route fits depends on what each party needs. Sharing suits a clean break and is now the default in most cases; offsetting can appeal where one party would rather keep the house and the other keep the pension intact; attachment is rare and ties the parties together for years, with the payment only arriving when the member draws the pension. A solicitor will weigh these against the rest of the settlement rather than picking on the pension alone.
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.
For the receiving party, the pension credit is real pension provision in its own right, not a lump sum to spend now; it is normally payable at the scheme's pension age like any other AFPS benefit, in much the same way a preserved and deferred pension waits until pension age. For the member, the debit is permanent and does not shrink if circumstances change later, so it pays to be sure the percentage is right before the order is sealed rather than after.
How AFPS 75, 05 and 15 affect a fair split
A pension sharing order is expressed as a percentage of the cash equivalent value, but an equal split of that value does not always mean an equal split of useful pension. The schemes pay at different ages, with a preserved AFPS 75 pension paid at 60 for service before 6 April 2006 and at 65 for service after that, a preserved AFPS 05 pension at 65 and a deferred AFPS 15 pension at State Pension age, so two pension credits of the same cash value can be worth quite different things depending on when each can actually be drawn.
The shape of the benefits differs too. AFPS 75 and 05 carry an automatic tax-free lump sum of three times the pension, while AFPS 15 has none and relies on commutation for cash, so the mix of income and lump sum behind a given value is not the same from one scheme to the next. Where a career spans more than one scheme, the cash equivalent value blends them, and the blend matters.
This is exactly where a specialist can earn their fee. A pensions-on-divorce expert, often an actuary, can advise whether to share by equal value or to aim for equal income in retirement, which can mean different percentages for each party. It is general information here rather than advice, and the calculation behind a fair order belongs with Veterans UK figures and a professional.
The steps and how long it takes
The order itself is part of the wider financial settlement, so it runs on the timetable of the divorce rather than separately. In broad terms you gather financial disclosure, request the cash equivalent value from Veterans UK, take advice on how to divide it, agree or have the court decide the split, and then the pension sharing order is implemented by the scheme after the divorce is finalised. The armed forces pension divorce calculator can show the rough scale of a given percentage while you wait for the official figure.
Implementation is not instant. Once the order takes effect, the scheme has a set period to set up the pension credit and apply the matching debit, and there can be a charge for administering the share. None of this is something you drive yourself; your solicitor handles the order and the scheme handles the mechanics.
Because the figures and the legal process are both specialist, this is an area to get right first time. An order, once sealed and implemented, is very difficult to unwind, so the moment to check the value and the percentage is before it is made, not after.
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. Divorce is also the moment to review your death benefit nomination, which the armed forces survivor and widow pension guide explains.
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.
Above all, do not make commitments based on a rough number. Use the estimate here to understand the scale and to ask better questions, request the official cash equivalent value from Veterans UK, and let your solicitor and, where the pension is substantial, a pensions actuary settle the figure that goes into the order.
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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.