When couples divorce, the value of their respective pensions is one of the assets taken into account when the financial settlement is decided.

However, where the pensions are substantial, this can cause complications. Pensions are not like other assets - they cannot be sold, they cannot rise in value once they start to be taken and they cease to have any value at all on death.

During a recent court case, the Court of Appeal made it plain that it regards pensions as different from other assets. The appeal was brought by a Mr Martin-Dye, who split from his independently wealthy wife in 2003 after sixteen years of marriage. In the High Court, he was awarded 43 per cent of the couple’s assets of £6.3m.

However, Mr. Martin-Dye’s pension fund amounted to over £940,000 - over a third of his share of the assets. His wife’s pension fund, on the other hand, was just over £100,000, a much smaller proportion of her asset share. He regarded this as unfair, hence his appeal against the decision.

The Court decided that the original ruling was unfair. In its view, an adjustment had to be made such that the value of the two funds was combined and the appropriate split made of the aggregate value (i.e. Mr Martin-Dye was to receive 43 per cent of the combined pension value of £1,040,000 and 43 per cent of the remaining assets). In practice, this meant that Mrs Martin-Dye was required to make a considerable ‘balancing payment’ to her ex-husband, in exchange for enhanced pension rights in the future.

Says Helen Hope, 'The courts are adopting a more sophisticated approach to financial settlements and in cases where pensions are a major asset, ‘pension-sharing’ orders are normal.'