Who Pays Pension Sharing Order Fees?
May 2025
When a Pension Sharing Order is made as part of a divorce or dissolution settlement, it doesn’t just involve the division of pension assets, it also involves costs. These can include court fees, solicitor costs, and administrative charges from the pension provider. A common question is who is responsible for covering these fees.
This summary provides general information and does not constitute legal advice on any individual circumstances.
There are typically several types of fees associated with a Pension Sharing Order. The first is the court fee for submitting the application, which is generally included as part of the wider financial proceedings. If the parties are filing a consent order, this fee will be lower than the fee to file a financial application.
Advisor fees are another important consideration. These may include charges for solicitors or financial experts involved in negotiating the terms of the financial settlement, drafting the order, and advising on the implications of the pension division. The complexity of the pension arrangements and the level of negotiation required can significantly influence the legal costs involved.
Once the court has approved the Pension Sharing Order, the pension provider will typically charge an implementation fee to carry out the division and create a separate pension pot for the receiving party. Implementation fees vary widely between pension providers and schemes, depending on the complexity of the schemes, the number of transfers, and the valuations required.
Who Is Responsible for Paying the Implementation Fees?
Parties should try to agree the payment of the implementation fees specifically (not including their respective legal fees) between themselves. They may choose to do so equally, or the party holding the pension may agree to pay these, with the cost to be offset in another way. If the payment cannot be agreed between them, however, then an application should be made to the court to decide the issue. In these instances, the court will usually consider a variety of factors, including the overall financial circumstances of both parties. The judge will aim to make a decision that is fair and reasonable, taking into account the ability of each party to contribute, as well as the broader implications for their financial position following the divorce or dissolution.
Either way, once the payment of the fees has been determined, it is important that this is set out clearly in the Pension Sharing Order. If the fees are not specified (by percentage), the party holding the pension to be shared will be liable for the charges, which could have an impact on the overall financial settlement.
Given the delays and other legal and financial issues that may arise if there is confusion about implementation fees once the process is underway, it is essential to clarify this matter early in the process and ensure that it is properly recorded in the order.
Can Legal Fees Be Recovered?
Each party will typically pay their own legal fees (including the fees relating to the Pension Sharing Order) unless the court orders otherwise. It is unusual for one party to be ordered to pay the other’s legal costs in family proceedings unless there is significant financial disparity, or there has been unreasonable conduct. That said, legal fees can be taken into account when negotiating a financial settlement, so it may be possible to agree an arrangement that offsets these costs in other ways.
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