One of the toughest aspects of divorce is deciding how property and possessions should be divided after the split, with pensions often being high on the agendaas, pension rights are often one of a couple’s most valuable assets.
Before December 2000, if one spouse had not worked throughout the marriage, they could be left without any pension rights, to rely on in retirement, following divorce. The introduction of pension sharing provided mechanisms for the treatment of pensions as an important part of the marital assets.
Fiona Yellowlees, a Partner in the Family Law team at WBW Solicitors in Newton Abbot, explains how pension sharing works and how it allows couples to achieve a fair and effective means of splitting pension rights..
What is a pension sharing order?
A pension sharing order allows one spouse to receive a percentage of the total value of the spouses’ pension. This is a “pension credit”. The rules of the pension scheme from which the pension credit is being taken will determine the options available for the recipient to invest the pension credit. This could be to invest in an existing pension, a new pension or as a member of the scheme from which the credit is taken.
What can be included in a pension sharing order?
Before a pension sharing order can be made by the court, it must be established how much the pensions of each spouse is worth. This can include any sharable aspect of a state pension, workplace pension schemes, personal pensions, or private pension plans.
Valuing pension pots
The value a personal pension or a defined contribution workplace pension can be ascertained by examining the most recent annual statement. This will state how much the pension fund is likely to produce as income in retirement and the current balance of your pension rights. . For more complicated pensions, such as a final salary pension or government backed pensions such as apply to service personnel, it is almost always necessary to seek expert advice when assessing your pension’s value.
How a solicitor can help
A specialist divorce and financial settlement family lawyer can talk you through your options, ensure all the required paperwork is in order, offer advice and representation in court and explain how best the pension credit can be apportioned.
For further information, please contact Fiona Yellowlees in the Family Law team on 01626 202415 or email firstname.lastname@example.org. WBW Solicitors has offices in Newton Abbot, Paignton, Torquay, Bovey Tracey, Exeter, Launceston, Exmouth, Sidmouth and Honiton.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.