Pensions are often overlooked when finances are separated upon divorce. They can be one of the biggest assets owned by a married couple and in some cases, are worth more than the family home.
It is often the case that women in retirement enjoy far less pension wealth and this could prove a disadvantage in later life if they do not secure a share of their partner’s pension at the time of divorce.
Now that we have moved to the new â€˜no-faultâ€™ divorce with an emphasis on a swift and amicable conclusion, pension sharing can be overlooked. Pension sharing is a complex area of law and specialist advice should always be sought whenever significant pension pots are held by either spouse.
How are pensions treated?
In a divorce, pensions are treated as capital and are calculated using their â€˜Cash Equivalent Transfer Valueâ€™ which each spouse must disclose during financial negotiations.
The Court have the power to make a pension sharing order transferring all, or a percentage of a pension pot to the other party, with the aim of achieving a fair outcome for both parties. A fair outcome means that the needs of any children (under 18) are met first and then you and your spouseâ€™s needs are met. The Court will take into account various factors including the parties’ age, health and earning capacity when deciding what is fair.
Where pension holdings are significant, pension experts can be instructed to prepare a report for you and your spouse outlining how to fairly split pensions upon divorce. They will calculate the optimum split to achieve fairness of future income best meeting both of your needs.
Looking for advice?
If you are in the process of divorcing and require advice on pension sharing, Curtis Whiteford Crocker have expert solicitors to help. We have offices in Plymouth, Tavistock, Torpoint and Kingsbridge so why not contact your local branch for advice on pensions and divorce?