The courts of England and Wales can order pension sharing on divorce, sometimes known as pension splitting. You may be unsure if you are entitled to some or all of your spouse, or civil partner’s pension. Once all assets have been disclosed our divorce experts can advise you on what you are entitled to.
Property in the form of bricks and mortar can be seen, touched, and valued based on current economic market conditions and this can lead people to underestimate the importance of dealing appropriately with pensions on divorce. Some pensions just offer a market value. Some offer an individual a pension income based on their final salary and length of service. These types of pensions are often referred to as final salary, or defined benefit pensions, and can hold great value.
It is not unknown to see cases where pension values are worth more than the marital home, which is likely to have a significant bearing on any financial negotiations in divorce. The problem with pensions has always been their relative intangibility. We help you understand their value and advise on whether pension sharing is appropriate in your case. If it is, our specialist team can advise you on how this is best achieved in the context of your divorce proceedings.
For clients who have a valuable pension(s) or indeed inadequate pension provision, this is often a great concern. It is never a simple matter, even for financially astute individuals, to understand the real benefit that a pension, deferred or current may have. Our expert team can explain why pension values on divorce are so important.
To determine how pensions should be shared on divorce, several factors may be relevant. For example, if either party has made significant pre-marital pension contributions this may need to be considered. The age of the parties at the time of divorce and whether either or both of you have any health conditions may also impact the calculations.
If equalisation of pensions is the appropriate solution this may involve one spouse transferring some of their pension funds to the other spouse by way of a pension credit, which is transferred into an existing fund, or a pension plan set up for that purpose. We can assist you in negotiating a fair percentage split.
In cases where a pension sharing order is not the desired outcome and does not suit your needs our experts can advise you on “off-setting”. Many people wish to retain their own pension funds, but their spouse may have a smaller, or perhaps no pension at all, and this must be addressed during the divorce process. Offsetting involves the spouse with the smaller or no pension receiving another asset, or a greater percentage of other funds available instead, perhaps a larger share of equity in the family home or a lump sum of money.
For more information on how separation will affect your pension https://resolution.org.uk/looking-for-help/splitting-up/money-and-home/pensions/
We work closely with specialist pension actuaries and Independent Financial Advisors (IFAs) to ensure that you receive the best advice available, and where necessary we will obtain a pension sharing report, so that the appropriate order is made if matters cannot be agreed.
If you require further information on the treatment of pensions on divorce, contact our team of specialists on 01245 895105 or send your enquiry to enquiries@manderslaw.com.
