Pension sharing order vs earmarking: a sharing order moves part of a pension to your ex for good, while earmarking pays them a share later.

The two orders do different jobs. A sharing order divides the pension itself at the point of divorce, while an earmarking order, also called an attachment order, leaves the pension with its owner and sets up payments to the other person as and when the owner draws benefits. The practical gap is whether the two of you stay financially linked afterwards. How each route would leave your retirement income, set against your other money, is something a regulated FCA-authorised adviser can go through with you, and you can ask to be put in touch via the form on this page. Advice on the order itself comes from a solicitor. The wider picture is in what happens to a pension on divorce.

The legal difference side by side

In England and Wales the court's power to make a sharing order is in section 24B of the Matrimonial Causes Act 1973, and sections 28 and 29 of the Welfare Reform and Pensions Act 1999 do the dividing. Attachment sits in sections 25B and 25C of the 1973 Act.

Pension sharing orderAttachment (earmarking) order
What happens to the pensionThe member's rights "become subject to a debit" and the other person "becomes entitled to a credit" against the scheme (1999 Act, section 29).Nothing is moved. The scheme is told to pay part of what it pays the member (1973 Act, section 25B).
How the share is setA percentage of the cash equivalent of the benefits on a valuation day, or where an amount is specified, the lesser of that amount and the cash equivalent.A percentage of each payment that becomes due to the member.
When the other person gets somethingOnce the order takes effect, which cannot be before the divorce order is made final (section 24B).Only when a payment falls due to the member.
Ongoing link between youEach of you owns a separate part of the pension.The pension stays in the member's name, and your ex depends on what it pays.

MoneyHelper describes the sharing result as a clean break: "As you each own a separate part of the pension, you get a clean break from each other." GOV.UK explains that a clean break means "you no longer have any financial ties to one another". The sibling guides explain how a sharing order works, which laws sit behind it and what it costs.

How an earmarking order pays out

Section 25B(4) lets the court require the scheme, "if at any time any payment in respect of any benefits under the arrangement becomes due" to the member, to pay something for the other person. The order must state the amount as a percentage of that payment. Nothing reaches the other person until the member's own payment falls due.

The court can reach further than the regular income, in England and Wales:

  • Where the member has a right of commutation, the order "may require him to exercise it to any extent" (section 25B).
  • Section 25C lets the court deal with a lump sum payable on the member's death, for example by requiring the member to nominate the other person to receive all or part of it.

MoneyHelper's guide sets out what this means for the person receiving the share. The order "only starts when money is taken from the pension, which is usually the decision of the person whose name it's still in"; payment is not guaranteed; the recipient has no say over how or when benefits are drawn; and the order will typically end on the recipient's remarriage or on either party's death, unless it includes death benefits. The same guide notes that in England, Wales and Northern Ireland the couple can choose which payments the order covers, and that the fee for an attachment order is often lower than for sharing. Regulation 6 of the Divorce etc. (Pensions) Regulations 2000 adds that when an order has ceased to have effect because of remarriage or a subsequent civil partnership, the recipient must tell the scheme within 14 days. For what sharing does on remarriage see sharing and remarriage, and for the position on death survivor benefits after divorce. What a sharing order costs is on the cost page.

Can one pension carry both orders?

In England and Wales the 1973 Act stops the two routes running on the same pension arrangement. A sharing order cannot be made while an attachment requirement under section 25B or 25C is in force on benefits under that arrangement (section 24B), and the attachment powers cannot be used on an arrangement that is the subject of a sharing order in the marriage, or has been shared between the two of you (sections 25B(7B) and 25C(4)). A couple dividing several pensions can use a different route for each, and can keep one pension whole and set it against other assets through pension offsetting.

Which route fits depends on the size and type of each pension, the ages involved, what else there is to divide and how much each of you wants to depend on the other's choices. That is a decision for you, your solicitor and, on the retirement-income side, a financial adviser.

Scotland: a different set of orders

The Family Law (Scotland) Act 1985 sets out its own list of orders. Section 8(1) includes "a pension sharing order" among them, and section 28 of the Welfare Reform and Pensions Act 1999 applies the same Part IV sharing mechanism to a pension sharing order under that Act.

The nearest Scottish equivalent to earmarking is section 12A, headed "Orders for payment of capital sum: pensions lump sums". It applies to a capital sum order where the pension benefits include a lump sum. The court can require the scheme to pay all or part of a lump sum payable to the liable person to the other person when it becomes due, and can make provision about a lump sum payable on the liable person's death. Section 8 also stops the court making both a pension sharing order and a section 12A order on the same pension arrangement in the same proceedings, and from making a sharing order where a section 12A order is in force on the same rights.

Procedure, valuation and the Northern Ireland position are covered in pensions on divorce in Scotland and Northern Ireland.

Frequently asked questions

Is pension earmarking the same as a pension attachment order?

Yes. MoneyHelper treats them as one arrangement, "called pension attachment or earmarking". Sections 25B and 25C of the 1973 Act describe an order requiring the scheme to make a payment for the other person, and the 2000 Regulations head their rules on it "Pension attachment".

How is a pension paid out under an earmarking order?

The scheme pays the other person a stated percentage of each payment that becomes due to the member, when it becomes due. Nothing is paid under the order until a payment falls due to the member. A pension that is already in payment raises its own points, covered in sharing a pension already in payment.

Does a pension sharing order pay income straight away?

It gives the other person a credit against the scheme, not a payment. What they can then do with the credit, including any tax-free cash, is set out in the tax-free cash guide.

What happens to an earmarking order if the recipient remarries?

The regulations contemplate an order ceasing to have effect because of remarriage or a subsequent civil partnership, and say the recipient must tell the scheme within 14 days. Changes to a sharing order are dealt with in can a pension sharing order be changed.

Is there a version of these orders for Pension Protection Fund compensation?

Pension Protection Fund compensation is divided by a different order, explained in sharing orders compared with compensation sharing orders.

Anyone weighing the two routes who wants the figures looked at by a regulated adviser can use the form on this page. A call-back is arranged from there, and there is no charge for the enquiry.

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