After the family home, pensions are often the second most valuable asset in a divorce case. However, in some cases, pensions can be morevaluable than the family home.
It is important parties obtain the value of their pension scheme from the scheme administrator early in the process. This is because it can often taken months for values to be received.
Understanding that each client’s situation is unique, we provide personalised advice tailored to your specific needs.
A pension is generally considered as something which gives you an income in retirement. For divorce purposes, it can be considered as both capital and income.
You can often draw a lump sum in retirement (capital) and generate an income from the remaining fund (income). The income element and security this provides in retirement should not be overlooked and why off setting must always be considered with a family law specialist and a financial advisor.
The court can order the pension to be offset against other assets, attachment of a lump sum or income or by way of a pension sharing order.
It is common for the court to offset or make a pension sharing order.
If the court make a pension sharing order, it means you will receive a percentage of your spouse’s pension into your own pension fund. You can then draw from this at the relevant age. Pension sharing orders can be made against pension schemes already in payment.
Yes. In England and Wales, pensions are treated as assets of the marriage and must be considered as part of the overall financial settlement. In many cases, a pension can be one of the most valuable assets, sometimes exceeding the value of the family home.
Pensions can be dealt with in three main ways: pension sharing orders, pension attachment (earmarking) orders, or by offsetting the value of the pension against other assets such as property or savings. The most appropriate method depends on the parties’ circumstances and future needs.
A pension sharing order transfers a defined percentage of one party’s pension into a pension in the other party’s name. This creates a clean break and gives each party independent control over their own pension provision.
Yes. Both parties are under a duty to provide full and frank disclosure of all pension arrangements, including workplace pensions, personal pensions, and self-invested personal pensions (SIPPs). Failure to disclose pensions can result in a settlement being challenged later.
Often, yes. An independent pensions expert can be instructed to value pensions accurately and advise on how they compare to other assets. This is particularly important where there are multiple pensions, defined benefit schemes, or significant differences in retirement provision between spouses.
Hale Family Law specialise in pensions and are Resolution Accredited for our work in Financial Remedy expertise.
