Pensions often represent a household's largest or second-largest asset, yet historically they have been overlooked or undervalued compared to immediate needs like housing. The SPP recommends codifying the distinction between matrimonial and non-matrimonial property, placing pension needs on an equal statutory footing in financial remedy decisions, and extending pension sharing orders to qualifying cohabitants.
Key recommendations from the SPP’s consultation response include:
Leveraging Pensions Dashboards
The SPP calls for verified Pension Dashboard records to become a standard part of court disclosure. In time, secure court access to dashboard data should be enabled to eliminate "lost" pension pots, speed up proceedings, and ensure full transparency.
Extending rights to cohabitants
The SPP supports introducing pension sharing orders for qualifying cohabitants and extending eligibility for dependants’ pensions to cohabitants automatically, removing onerous proof-of-dependency hurdles.
Objective criteria & lead time
To ensure smooth implementation, the SPP urges policymakers to establish clear, objective legal definitions for "qualifying cohabitants" especially given the upcoming 2027 Inheritance Tax changes relating to unused pensions, and to allow sufficient lead-in time for pension schemes to update processes and handle increased demand.
Oliver Topping, Chair of the SPP’s Legislation Committee, said: "Pensions are fundamentally long-term assets designed to provide security in retirement, yet they are too often overlooked during relationship breakdowns. This is frequently to the detriment of the financially weaker party who may have taken career breaks for caregiving.
Pension needs should be given equal prominence in family law and vital protections such as pension sharing should be extended to cohabiting couples.
Harnessing the new Pensions Dashboards programme for court disclosure would be a game-changer in ensuring full transparency.
However, to make these reforms workable in practice, policymakers must provide clear, objective criteria for defining qualifying cohabitants and allow the pensions industry sufficient lead-in time to adapt."
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