Divorce is something that nobody wants to go through, however the office of National Statistics estimated that 42% of marriages ended in divorce. There are multiple ways in which pensions, and assets, can be shared between two parties. The husband and wife can agree to offset a pension without a court order. Alternatively, the court could make a pension sharing order, or an earmarking order. The sharing of non-pension assets doesn’t necessarily require court input. But what pensions are we talking about here?
Nearly all pensions can be shared during divorce, however the basic state pension cannot. This means that all work place pensions (pensions that started through a job), personal pensions (pensions that you have started yourself), and any additional state pensions (SERPS/state 2nd pension) can be shared.
It is crucial that you know your rights when it comes to divorce, and pension sharing. Couples don’t tend to prepare for divorce, and can quickly find out that their pension benefits and retirement plans have significantly changed post-divorce.
Before the divorce is finalised, clients will receive transfer values for their pensions, which will be totalled together for a couple, and the court will issue a decision. It is at this stage where most clients seek advice, as they don’t know what to do with this pension share.
If you come out of a divorce with a larger expected retirement fund than prior to divorce, it is essential this is reviewed and plans are put in place to correctly utilise this fund, with regard to your personal situation.
Please feel free to contact us for a chat about your pension before or after a divorce