Pensions in Divorce

No one ever gets married to get divorced, we get married for love, but along the way something just didn’t work.

Remember help is always on hand, I always recommend you speak to a mediator or solicitor when the time comes in order to split your assets.

However pensions in divorce can be complex and overwhelming.  As Independent Financial Advisers we can help navigate this process and remove stress working with your solicitor, ensuring a fair division of retirement assets when a marriage comes to an end.

It is worth noting that if you need to divide the pension assets you have a number of options:

Pensions Offsetting – 

The value of any pensions is offset against other assets.

For example, one person might get a bigger share of the family home in return for the other keeping their pension.

This can offer a simple, clean break which doesn’t interfere with existing pensions.

Pensions Sharing – 

All or a percentage share of person A’s pensions is transferred to person B.

It can be transferred into a pension in person B’s name (a new or existing pension) or person B might be able to join the scheme the pension has come from. The pension scheme rules will decide which method is allowed.

This means person B has full control over that share and can choose when and how to use it.

This option also offers a clean break, but bear in mind that you can’t share separate life cover and death benefits.

Pension attachment/earmarking orders – 

Person A agrees to pay a portion of their pension income to person B (their ex-partner) when it starts being paid to A.
These are known as ‘attachment orders’ in most of the UK: person B can get some of the pension income, the lump sum or both. But person B can’t get pension payments before person A has started taking their pension.

While this might keep things simpler to arrange as part of the divorce, it doesn’t offer a clean break. This is because person A still controls when and how the pension is used at retirement.

As an independent financial adviser I like to get to know my clients and understand their goals, needs and wants so it is vital that when you are going through a divorce you get the outcome that is right for you.  Remember in divorce pensions are only one aspect as it may be more beneficial to split the assets to retain cash as you may need to purchase a new home to move to or gain a mortgage.

Regardless if you’ve already started your divorce proceedings and want to understand the financial aspect in greater detail we can be reached on 01483 654135 or my direct email leon.alden@2plan.com