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When going through a divorce or dissolution, it is often the case that couples must split their assets. One of these assets may be a pension (DB/Final Salary or Defined Contribution). Couples must understand the concept of Cash Equivalent Transfer Value (CETV) when considering how to divide a pension.

The CETV is a lump sum amount used to transfer a defined benefit pension scheme from one provider to another. It is calculated by pension scheme administrators to provide a value for a scheme member’s accrued pension benefits. CETV pension divorce is essential when deciding to split a pension in a divorce.

In this blog post, we will discuss CETV, why it is important always to disclose your pension asset, how to agree with your partner regarding a CETV option, and how your IFA can help you. Before reading, watch this video which further explains the importance of disclosure and agreement for CETV options during a divorce.

Why It Is Important Always to Disclose Your Pension Asset

It is vital for couples always to disclose their pension asset and pension income when considering their divorce settlement. This is because pensions are valuable assets that can impact the overall financial settlement, and it is important to ensure that each partner is aware of their rights and responsibilities regarding the pension. Furthermore, pensions are not always easy to value and understand, so it is crucial to get professional advice from a regulated IFA when considering a CETV divorce settlement. 

Making Civil Partnership Agreement

Making an agreement with your partner to split your pension arrangements in divorce can be a challenging process. As such, it’s important to understand the Cash Equivalent Transfer Value (CETV) element itself. This is an assessment of the value of the pension and is based on the pension scheme’s rules. It’s a figure that can’t be negotiated and is provided by the pension provider.

To make an agreement, both parties need to understand the CETV figure and its implications on a pension. The CETV figure will consider any benefits such as life assurance, ill health, life expectancy and death in service benefits. It is essential to consider the CETV figure carefully, as it can impact the outcome of the pension split.

Additionally, it is also important to consider any additional costs associated with the pension split. These can include legal fees, valuation fees and any financial advice costs. It is worth seeking professional advice from an IFA to ensure the pension split is fair and legally binding.

CETV Options During Divorce

Typically, there are three options that you can do on your CETV: offsetting, pension-sharing, and earn making. Let’s discuss them in more detail. 


As a starting point, offsetting is a way for both parties in a divorce to retain their pensions while still being able to divide the value of their assets fairly. In this case, the value of the pensions is offset against any other assets of a similar value, such as money or real estate.

This means that the value of the pensions is taken into account in the division of assets, but none of the parties will have to give up their pension. This is a fair way to split assets, as it allows both parties to retain their pensions while ensuring that each party receives equal property and assets in the divorce.

Pension Sharing

In pension sharing, the court will decide how to divide an individual’s pension benefits if they are going through a divorce. This involves splitting the pension into two separate pensions. This will mean that the pension benefits are divided in a way that will allow both parties to have access to their pension funds.

The CETV will consider factors such as age, length of service and type of pension plan. This will then determine how much of the pension will be given to each party upon the split. The court order will finalize this in a pension sharing order, and once it is, the pension benefits will become completely separate and independent.


Earmarking or pension attachment is a process that allows a portion of a person’s pension to be paid to their ex-spouse upon retirement. Earmarking order is done to maintain a connection between the two parties and ensure that the ex-spouse receives their share of the pension.

This is typically done as part of a spouse or civil partner divorce settlement. The amount that is paid to the ex-spouse is determined by the court and is typically based on the length of the marriage and the number of assets that were accumulated during the marriage. This type of payment ensures that both parties are still able to benefit financially from the pension, even after the divorce.

How an IFA Can Help You

When considering how to divide a pension pot in a divorce, it is vital for couples to understand the CETV and its implications on the pension split. It is important to seek professional advice to ensure the pension split is fair and legally binding.

If you are going through a divorce and need help understanding and navigating the Cash Equivalent Transfer Value (CETV) of your pension, it is important to seek professional advice. Our team of qualified and FCA-regulated Independent Financial Advisors (IFAs) are here to help. You can also consult to our IFA for the CETV calculator for divorce.

We offer a free initial consultation call at your convenience date, where we can discuss your specific situation and provide guidance on the best course of action. Don’t hesitate to contact us to schedule your consultation today and take the first step towards a fair and legally binding Defined Benefit scheme split.


Dominic James Murray

My career in financial services began in 2010 during my Bachelor of Science (BSc) Undergraduate degree at Aston University in England. The degree required me to spend a year abroad working with an established organisation.

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