Divorce and SSAS

Published by Lisa White on

Estimated reading time: 6 minutes


I have heard that divorce is one of the most stressful things a person can go through. I have also heard it can be a costly exercise, particularly once all of the professional fees have been taken into account. If you are going through a divorce, probably the last thing on your mind will be your pension savings or those of your spouse.

However, as pension savings can be a valuable personal asset they might be taken into account in your divorce settlement. Giving some thought to any pension savings you or your spouse hold in a SSAS at the start of your divorce proceedings could save you both stress and cost as matters progress.

As SSAS practitioners, when a divorce is being finalised we are usually provided with a pension sharing order or annex confirming how pension savings should be allocated between you and your spouse. Typically this is a percentage of the value of the assets held in the SSAS.  If part of your SSAS is to be allocated to your spouse, you will be subject to what is known as a pension debit.  If part of your spouse’s SSAS is to be allocated to you, you will be subject to what is known as a pension credit.  There are things to consider in each case, some of which are listed below.

  1. The trustees of the SSAS will need to place a current value on the SSAS assets.  If, for example, the SSAS assets include property then a surveyor will need to be appointed to confirm the current market value of the property, taking into account any leases in place in respect of the property and any planning permissions.  Similarly, if the SSAS assets include unquoted shares the current value will need to be confirmed by a suitably independent professional. You will need to budget for the cost of obtaining the valuations.

  2. Your current share of the SSAS assets will need to be calculated, taking into account any contributions or transfers into the scheme from other registered pension schemes and any benefits paid to you.

  3. The amount to be allocated to your spouse; i.e. the pension debit will need to be calculated based on the information set out in the pension sharing order.

  4. How the pension debit will be paid to your spouse will need to be agreed.  Your spouse will decide whether they would like to leave the funds in the SSAS or move them to another registered pension scheme.

  5. If the rules of your SSAS permit and your spouse chooses to leave the funds in the SSAS, a separate arrangement will be set up within the SSAS for your spouse and the pension debit notionally allocated to them for their benefit.  Your spouse will become a member of the SSAS and will need to be made a trustee if the requirements that have to be met, where all members of a SSAS are not trustees, are to be avoided.  Going forward, as a trustee, your spouse will need to be a party to all decisions in connection with the running of the SSAS and its investments; for example, whether to grant a loan to the SSAS’s sponsoring employer or buy a property.  This could prove difficult if the divorce is less than amicable.  However, retaining the funds in the SSAS could help the trustees maintain their plans for the SSAS investments.  Good financial advice for both you personally and the trustees could therefore be beneficial.

  6. If your spouse chooses to transfer the funds to another registered pension scheme the SSAS will need to have sufficient liquid funds to settle the pension debit in cash or sufficient assets if an in specie transfer is to be made.  The SSAS may have a significant payment to make and the trustees will need to consider the logistics of actually settling the pension debit.  Will assets need to be sold?  Will the trustees need to borrow funds?  Or can one of the SSAS assets be re-registered to your spouse’s pension scheme? 

  7. If the pension debit is transferred to another registered pension scheme, this could significantly reduce the value of the SSAS assets and the scope for future loans and borrowing, which could have an impact on the SSAS investments.

  8. There is a strict timescale that will need to be followed to settle the pension debit.  This is usually four months from when the pension sharing order has been issued and all of the relevant information has been provided.  Everyone will have to move swiftly if the deadline is to be met. It is important to discuss the practicalities of actually settling the pension sharing order with your solicitor and financial adviser early on in the divorce process.  Selling SSAS assets or arranging borrowing for the SSAS can take some time but the four month deadline has to be met regardless.

  9. The pension sharing order will set out how any charges in respect of the settlement of the pension debit should be allocated between you and your spouse.  Charges can be significant and will need to be budgeted for.  Your SSAS provider should be able to give you an indication of the work involved and likely charges once they are aware of the plans for how the pension debit will be settled.

  10. Once the pension debit has been paid your pension savings may be significantly reduced.  You may therefore wish to start building up your pension savings with you or the SSAS sponsoring employer making contributions to the SSAS.  If you have a valuable form of protection against the lifetime allowance, you may lose this protection if contributions are made on your behalf.  It is therefore vital to speak with your financial adviser before making any contributions and to establish what tax relief might be granted on the contributions.

  11. Your valuable protection against the lifetime allowance may be affected by the pension debit.  It is worth speaking to your SSAS provider or financial adviser to confirm if this is the case and what impact this will have.

  12. As your circumstances change you will probably want to update your ‘expression of wish’ form, confirming to whom you would prefer any benefits to be paid in the event of death.


  1. You will need to decide how the pension credit will be paid to you.  Will you leave the funds in your spouse’s SSAS or transfer them to another registered pension scheme?  You should speak with a suitably qualified financial adviser and your solicitor regarding your options before making any decisions.

  2. If the rules of your spouse’s SSAS permit and you choose to leave the funds in the SSAS, a separate arrangement will be set up within the SSAS for you and the pension credit notionally allocated to you for your benefit.  You will become a member of the SSAS and may be asked to become a trustee.  Going forward, as a trustee, you will have certain duties to fulfil, including being a party to all decisions in connection with the running of the SSAS and the SSAS investments.  This could prove difficult if the divorce is less than amicable. 

  3. If you choose to transfer the funds to another registered pension scheme the pension credit will be paid to your scheme in cash or as a transfer of an asset.  You will need to agree what form the transfer will take with the trustees of your spouse’s SSAS.

  4. There is a strict timescale that will need to be followed to settle the pension credit.  This is usually four months from when the pension sharing order has been issued and all of the relevant information has been provided.  Everyone will have to move swiftly if the deadline is to be met. It is important to discuss the practicalities of actually settling the pension sharing order with your solicitor and financial adviser early on in the divorce process, ensuring that you have provided all relevant information to enable the pension credit to be paid.

  5. The pension sharing order will set out how any charges in respect of the settlement of the pension debit should be allocated between you and your spouse.  Charges can be significant and will need to be budgeted for.  There may also be costs for setting up your new pension arrangement which you will need to consider.

  6. Once the pension credit has been paid your pension savings may increase significantly.  The pension credit may not affect your annual allowance; i.e. the amount you can contribute to your pension savings tax efficiently.  However, it will affect the amount of your unused lifetime allowance. It may be beneficial to speak to your financial adviser regarding this and also consider whether you would benefit from applying for protection against the lifetime allowance, if eligible.

  7. If you are an existing member of the SSAS you will have pension savings in the SSAS from your contributions and transfers in.  You may wish to consider whether to transfer these funds to another registered pension scheme or leave them in the SSAS.  They may not form part of the pension credit and may therefore need to be considered separately.  It is important to speak with a financial adviser before making any decisions as some rights may be lost if you transfer.

  8. As your circumstances change you will probably want to update your expression of wish form, confirming to whom you would prefer any benefits to be paid in the event of death.

The settlement of a pension sharing order can be a lengthy and complicated process and there is a lot to consider, especially at what can be a difficult time for you personally.  Thinking about what you are trying to achieve and the practicalities early on in the process is key.  It’s also important to take advice from your solicitor, financial adviser and SSAS provider who will guide you through the process and hopefully make things as easy as possible for you.