Every pension valuation rests on assumptions. Before relying on an order, a court and each party should be able to see how far it would move if those assumptions moved. Here is how our reports show that, and what each test is for.
The short answer
We re-work the answer under two mortality tables, and at three discount levels:
- on gilts;
- at gilts plus 1%;
- at the "break-even": the level at which our value equals the scheme's own cash equivalent.
The report gives the range of orders that results. You do not have to take a single figure on trust. You can see how much it depends on each assumption.
Where the central figure comes from
The central answer is fair value: what it would cost, on the valuation date, to secure the same income with no risk. We use the government bond (gilt) curve, market inflation expectations and standard national life tables.
The same basis is used for every pension. £1 a year of pension is worth the same whoever promises it: a pension scheme, an insurer or a fund. That is what lets different kinds of pension be added together fairly.
The scheme's cash equivalent is a different thing. It is the scheme's own figure, on its own basis, and it differs from scheme to scheme. We state it beside fair value. It is not the basis of the division.
What each test shows
Two mortality tables
A pension paid for life is worth more the longer people are expected to live. Re-working the answer on a second table shows how far the order depends on that choice.
Gilts plus 1%
Fair value discounts on gilts. Re-working the answer at gilts plus 1% shows how the order would move at a higher discount level. If the order barely moves, the answer is robust to the discount rate. If it moves a lot, the court can see that too.
The break-even
The break-even is the discount level at which our value equals the scheme's own cash equivalent. It has one job: to test the scheme's figure against fair value. It shows how far from gilts the scheme's own basis sits.
It is not used to price anyone's pension. It is not a second answer, and it is not a fallback if the parties prefer the scheme's figure.
An illustration: when the scheme's figure differs
One of our cases shows why the comparison matters. It is anonymised and its figures are rounded. The pension was a deferred final-salary pension. The scheme had been bought out by an insurer, so it was now an insurer's policy. The insurer's transfer value was about 11% below fair value.
| Outcome B (capital) | Order |
|---|---|
| On fair value | about 48% |
| Sharing the gap in the instruction's shares | about 51% |
The order's percentage is applied to the insurer's own figure, not to fair value. Applied to that lower figure, the 48% order leaves the receiving person short of the capital the calculation found they need. The certificate shows that shortfall in pounds. Beside the order, it shows the order that shares the gap.
The first order stays the answer to the instruction. The second holds only at the quoted figure, and the figure on the day of transfer may differ. That is itself a sensitivity, and the report says so.
Why orders are given to two decimal places
Orders are given to two decimal places, because that is the precision the court's form supports. Any rounding left over is stated. Two decimals is the precision of the form. To see how much the assumptions matter, look at the range of orders.
What can only be stated in words
Some things cannot be known before the order is made. We analyse what can be known, and describe in words what cannot. One example is the terms on which a scheme converts a pension share it keeps.
How the order is implemented, by keeping the pension share in the scheme or transferring it out, is the receiving person's choice. It is made on regulated financial advice after the order. We describe it to help the court. It is not part of the valuation.
What to do
- Read the range of orders in the report, not only the central figure.
- Check how far the order moves between the two mortality tables and between gilts and gilts plus 1%.
- Treat the break-even as a test of the scheme's figure, not as a price for the pension.
- Where the order falls on a defined-benefit pension, read the order that shares the gap beside it, and remember it holds only at the quoted figure.
- Ask any questions about the report in writing, under rule 25.10 of the Family Procedure Rules.
More on how we work is on our Pension Sharing Order page.
Last updated October 2026.