For Family Lawyers & Solicitors

As you are aware, when a pension sharing order is awarded against a pension that is already in payment, there will invariably be a clawback from the member in respect of overpaid pension benefits from the Transfer Day to the date of implementation.

Members often feel ‘wronged’ by this clawback of their benefits; however, the Pensions Ombudsman rarely upholds such complaints in his determinations.

The Pensions Ombudsman has now taken the step of publishing a factsheet on the subject – something that is not done frequently. This emphasises the legal principle that such overpayments will normally have to be repaid, and that the claim will be brought against the member rather than any other party, such as the ex-spouse where periodic payments have been made from the overpaid pension income.

The factsheet can be found at: Pension overpayments  Information for members_0.pdf

The key issue is to ensure that any client who is going to suffer a pension debit — either immediately (where benefits are already in payment) or potentially in the future (if benefits come into payment before the pension sharing order is implemented) — is made fully aware of the possibility of clawback.

We have recently been appointed to deal with the implementation of a number of pension sharing orders that were awarded many years ago — in some cases going back to 2008 — but were not implemented at the time. In several of these cases, benefits were subsequently put into payment by the member without any allowance being made for the pension debit, meaning that tax-free cash sums are also being clawed back.

We believe that our earliest possible involvement in implementing a pension sharing order can help ensure that you and your clients are protected, as far as possible, from unexpected repayments. Unfortunately, we may not always be able to avoid a clawback altogether — but there will at least be a plan in place.

We will be discussing these issues at our forthcoming seminar in Hemel Hempstead on 24 March 2026. If you have not already booked your place, a few spaces are still available. You can register here.

As always, if you have any questions, please feel free to get in touch.

Clive Weir
Expert Consultant | MKC Professional Services

Chris Stimpson
Relationship Director | MKC Professional Services