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Pensions and divorce

During a marriage, one partner's pension can outgrow the other. During the marriage this isn't a problem, but if the marriage ends, you are no longer entitled to a lump sum or income on your partners death or retirement, and this can lead to inequality in the standard of living you can expect in your old age.

What happens to your pensions when you get divorced?

Throughout a marriage both husband and wife will have worked on the basis that on retirement they will both enjoy spending the lump sum they will receive on the retirement of one, and the income from that pension. If the marriage ends, however, they are no longer entitled to a lump sum on the other’s death or retirement or to the income from the other’s pension.

It is often necessary then, on divorce, to try and balance out this potentially huge inequality. There are various ways to achieve this which are:-

  • By payment of spousal maintenance, which ceases when the owner of the pension dies
  • Pension earmarking orders (which again ceases when the owner of the pension dies)
  • Pension sharing orders
  • One-off payments to help the one with lesser pension provision to offset the loss of their interest in the other’s pension scheme on divorce.

Valuing a Pension 

This is an inexact science but the Courts and Solicitors generally rely on Cash Equivalent Transfer Values. We recommend that you request this from your Pension providers as early as possible as it can take some months to obtain this.

Pension Sharing

Within divorce proceedings the Court can make an order providing that a share in one party’s pension scheme can be paid into a pension scheme set up for the other.

Offsetting

A Pension scheme is one of several assets in a marriage. If one party to the marriage keeps their pension it may be appropriate for the other to keep a higher percentage of the other assets in the marriage, to provide them with alternative resources on retirement.

The significance of pensions in divorce varies depending on the length of the marriage, how close the husband and wife are to retirement, and the difference in value between their respective pensions. Pension sharing orders are just one of the options open to the Court and the parties when deciding on a fair overall settlement.

Neves Family Law Solicitors offer a fixed fee meeting. If you are facing a relationship breakdown and need some advice on divorce, separation or pension sharing talk to us on 0330 0945 500, email family@nevesllp.co.uk or complete our Contact Form and we'll get back to you.

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Beth Woodward, I wanted to say thank you for supporting me on my recent divorce. Faced with one of the most aggressive and unpleasant legal firms in London, you led me through both the family and financial divorce courts and more than achieved every one of my goals for the divorce. Most importantly, I have equal time parenting with my two girls and a really fair settlement so I can support them financially, both not even remotely offered by the other side. You listened and supported me when I really went for it, kept me sane through the FDR and court visits and also gave me the tough messages when I need to hear it. Thank you, I can’t quite explain how we did it, but we did 😊 😊 😊 😊
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Emily has supported me through a divorce with excellent advice and guidance at every stage. All issues and options were explained clearly and fully. Possible outcomes were fully outlined to me throughout the process. Emily's professionalism has been of the highest standard. The kind and understanding manner in which Emily has supported me at all stages of the process is something that I am extremely grateful for. I literally felt the pressure shift from my shoulders. This is why I give 5 stars for the assistance I received.
Beth Woodward
Partner and Head of Divorce and Family Law
Heidi Fleming
Senior Associate - Divorce and Family Law
Tina Shah
Senior Associate - Divorce and Family Law
Emily Pope
Associate - Divorce and Family Law
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