Pensions are assets when considering financial settlements between divorcing couples.
To know how to divide pensions on divorce for a fair settlement you will need to have your pension valued and disclose the value to your spouse. We guide you on how to get the valuation and tell you what information to disclose.
On your divorce, all of your assets and those of your ex-spouse are taken into account. If you decide to opt for pension offsetting, each party retains their pension assets, but these are then offset against the other assets. – for example, if one person has a large pension pot, the other may receive other assets such as the house as long it is of similar value.
Pension sharing is where the value of one partner’s pension at the time of the divorce is divided between both of you. You may not receive an equal share, as a court might decide that one partner should have a greater share of the pension than the other.
If you receive a share of your partner’s pension you may have some choices as to what you can do with it. These could include:
• becoming a member of your partner’s pension scheme (if the scheme’s administrators allow it)
• transferring a sum of money to your own pension
• transferring a sum of money to a new pension you have set up
Depending on how the pension scheme works, you may receive an income and a lump sum of money once you retire. The pension scheme will probably charge you a fee for the work involved in sharing a pension.
A pension attachment means that you will receive an agreed percentage of your partner’s occupational or personal pension once they have received payment of their pension. This could be a lump sum of money or it could be a regular pension payment.
However, if your partner dies, you would not receive any more money. This is because you only receive money from an attachment order if the pensioner receives payment.
If the order is for regular payments, these would stop if you remarry. But, depending on the terms of the order, you may get a lump sum if your former partner dies.
We will guide you through pension valuations, give options that are suitable for you, so you can decide which route is right for you.
If you’re thinking about how you will manage your pension during your divorce, our team is here to help. Contact us today.