Pensions and divorce

Our pensions can often be our most valuable asset – in some cases, even more valuable than our homes!

Therefore, it is vitally important that couples understand their pension rights if they decide to divorce or dissolve their civil partnership. 

When splitting assets, the total value of the pensions that you have built up is taken into account. This can include pensions that you and/or your ex-partner accrued before you were married or entered into a civil partnership.

It is crucial that any pension funds are valued accurately on divorce. Once the pension valuations have been agreed, there are 3 main ways that pensions can be shared on divorce:

Pension Offsetting: the value of a pension is offset against other assets. One partner retains their pension and the other partner is awarded a greater share of other assets e.g. the family home.

Attachment Order: an instruction from the court which requires the pension scheme to pay benefits directly to an ex-spouse/civil partner rather than the member.

Pension Sharing: the ex-spouse receives a percentage share of the other’s pension. This may mean that their percentage share need to be transferred into their own pension (or a new pension if they don’t have one).

Divorce can be a very stressful time but involving an Independent Financial Adviser, particularly where pensions are involved, can bring expertise, peace of mind and a more positive financial outcome. 

If you would like to speak to us about your pension, or any other aspect of financial planning then please call 01257 260011.

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