Concept for Pensions and divorce - specialist advice is crucial

In some cases pensions can be worth more than the family home, so despite the stress and emotions of divorce, it is crucial to keep a clear head and take specialist advice early.

Don’t lose out

Many people do not understand that pensions have a capital value that can be divided on divorce – they usually just think of them as future income and they are often ignored if they are not yet in payment. The fact is that pensions can be shared both when they are already in payment and when they are yet to be drawn.

Although specialist advice is required, particularly for high value and complex pension schemes, the fact that pensions are shareable at the time of financial settlement means that you do not have to wait until your ex has retired before accessing that asset. However, it seems that many people are unaware of this.

Despite the law changing in the early 2000’s research published by Aviva says that in over a third of divorces one spouse did not make a claim on their former partner’s pension. Further research by Manchester University discovered in a recent report, that men hold between 68-81% of couples’ combined pension wealth. This suggests that women are the ones likely to miss out after divorcing.

A simple reason for this could be lack of awareness. A good lawyer will be able to support you through the process and ensure that all eventualities are considered so that you don’t lose out financially.

Protecting a pension

For some people their priority will be to protect their pension, and there are many steps that can be taken to do this. This can include offsetting and detailed consideration of when the pension was accrued.

The issue of when a pension was accrued is an important one and should not be overlooked as it may have a bearing on whether the pension will be considered a matrimonial asset and be subject to division on divorce.

Specialist advice

Whether you are looking to access your spouse’s pension or protect your own pension, this is a specialist area, so it is crucial to take advice early from a law firm with pension sharing expertise.

Pensions with an off-shore element or pension schemes that contain property, such as private schemes set up by business owners, are all subject to the same pension sharing rules. However, their complexities will need careful consideration and it may be prudent to involve an actuary to consider the nuances of more unusual schemes. Special considerations can also apply to armed forces and police pension schemes. Indeed, most occupation schemes have some form of hidden benefit, which should not be disregarded.

If you have any further queries regarding pensions and divorce, please feel free to contact our Family Team, we would be happy to help.