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Divorce and Pension Rights

Divorce and Pension Rights

Most of us do not like thinking about planning for our retirement. We often say tomorrow but for many of us tomorrow never comes. However if you are getting divorced you have to face the prospect of the end of your marriage and sorting out financial claims, including pensions. The temptation, when there is so much stress and a need to move on with your life, is to accept a financial settlement without paying enough attention to pensions. After all, there is always tomorrow. Research from Royal London says that women who divorce end up with less than half the property and assets of married couples and, more importantly, less than one third of the average pension pot. Royal London are rightly encouraging those who are divorcing to recognise the value of pensions and to take pension  advice to make sure , in Royal London’s words , that  divorced women do not continue to be ‘pensions poor relations’. The Royal London research analysed the data from the government’s Wealth and Assets Survey (WAS), and looked at the pensions and property of divorced women compared to with married couples. The main points that came out of the Royal London research were: For women who are aged over fifty the average married couple has three times the pension wealth of the average divorced woman; and Women who are aged over fifty and divorced do not have more equity in their family home to compensate them for lack of pension wealth. Some may shrug off this Royal London research, thinking that it is very specialist. However, one in three women aged 55 to 70 will experience marital breakdown or divorce. Therefore, whilst Royal London has looked at complex data it is a common problem, the effects of which are only appreciated long after a divorce and when a woman comes to draw her pension income.   Divorce and pension rights As a specialist Manchester family law solicitor advising on divorce and pensions claims my experience shows there are a number of reasons why pensions are not properly considered on divorce. The main reason that pensions are not divided fairly is that people do not understand them and think that they will have many years to worry about building up a pension. There is often a reluctance, on the part of both husband and wife's to get a pension report from an actuary or pension expert. That is partially because people worry about the cost of a report and partially because they do not see the relevance of a report. Frustratingly, from a Manchester divorce solicitor and pension expert’s point of view, the importance of the pension report often only becomes apparent after you have received the report. Nowadays I tend to ask if someone would buy a house without a survey. The answer is invariably no, and a puzzled glance questioning why I would even contemplate buying a house without a surveyor’s report. However, pensions can be just as valuable as a family home and so they need to be treated with the same respect. The other reason people do not look at pensions seriously on divorce is that retirement, even if it is five or ten years away, seems a very long way off indeed. A pension expert will tell you that it is not and even ten years of making pension payments into a pension scheme may not recoup what you have missed by agreeing to an unfair division of the pension assets on divorce. When you are getting divorced, it is hard to get to grips with all that is happening in your personal and financial life. That is why you need an expert divorce solicitor. They in turn need to be helped by a pension actuary or expert to look at the true value of the pension pot and to consider your pension and financial settlement options.   Pension valuations When you get divorced and sort out financial disclosure, you will be presented with what is called the cash equivalent transfer value of your pension and that of your spouse. The paperwork and figures may look impressive but they can be highly misleading. If you have a private pension with a transfer value of £100,000, you would think that your pension pot is as valuable as your spouse’s final salary pension pot with a transfer value of £100,000. You would therefore assume that a fair financial settlement would involve you both keeping your pensions, with no need for a pension sharing order. You could not be more wrong as a pension actuary may tell you that the occupational pension will pay out three times the pension income of the private pension scheme. That means if no pension sharing order is made one spouse is on triple the pension income of the other spouse. It is important that even if you are a bit hazy about pensions that you chose a divorce  solicitor who knows about pension rights and the importance of getting expert help from a pension or financial advisor or actuary. As a Manchester divorce solicitor, I know how vital it is to protect someone going through a divorce. Divorce and pension rights are not likely to be a priority topic but I know my job is to look at both short term and long term interests, and that normally includes the option of a pension sharing order. By Robin Charrot For information and advice about pensions and financial claims on divorce please call me on +44 (0) 1477 464020 or contact me by email at robin@evolvefamilylaw.co.uk Appointments available in Prestwich, Manchester and Holmes Chapel, Cheshire
Robin Charrot
Jun 15, 2019   ·   5 minute read
Can Bad Behaviour Affect a Financial Settlement on Divorce?

Can Bad Behaviour Affect a Financial Settlement on Divorce?

When I first see a client regarding their divorce, one of the questions they will most often ask me as a Manchester divorce solicitor is ‘can my spouse’s bad behaviour impact our financial settlement on divorce?’ Often, the desire to apportion blame for the breakdown of the marriage and divorce can result in a husband or wife wanting the financial settlement to reflect this, for example when a spouse has had an affair, and the affair has involved some level of dishonesty.Manchester divorce solicitors If you are separating or divorcing and have questions about how your husband or wife's behaviour will affect your financial settlement then Manchester divorce solicitors at Evolve Family Law in Whitefield can help you. Call us on 0345 222 8 222, complete our online enquiry form or email robin@evolvefamilylaw.co.uk.Whitefield based Evolve Family Law solicitors are approachable and friendly, providing pragmatic expert divorce and financial settlement solutions. Call us on 0345 222 8 222 and let us help you.   Divorce proceedings and unreasonable behaviour A spouse’s bad behaviour can be very relevant to the actual divorce proceedings, because under the current law ‘bad’ behaviour always has to be used for a divorce which is started less than two years after separation. The direct financial effect of this ‘bad’ behaviour is usually an order for the ‘bad’ spouse to pay the legal costs of the divorce proceedings (normally about £1,500).   The link between ‘bad’ behaviour and division of finances is less definite, and a spouse will very rarely get less of the family money because they have had an affair. However, a spouse’s behaviour during the marriage must be considered by a court (the court refers to it as ‘conduct’) when it is deciding what would be an appropriate financial settlement.   Is the behaviour gross and obvious? The court’s view is that a spouse’s conduct will only affect the financial settlement if it is ‘gross and obvious’, and so serious that it would be unfair for it to be ignored. Whether a spouse’s conduct has been serious enough to be classed as ‘gross and obvious’ will be a highly subjective decision. From the point of view of an experienced Manchester divorce solicitor, I know it when I see it!   What is classed as bad behaviour? There are a number of forms of bad behaviour or ‘financial conduct’, as it is called in legal terms. It is always easier for the court to change the financial settlement if there is a direct link between a spouse’s conduct and the family’s finances, for example: If a spouse has needlessly stopped working, or recklessly overspent, or gambled away a lot of the family’s money; If a spouse has physically assaulted and injured the other spouse so that their ability to work and earn money has been affected; If a spouse has been found guilty of a financial criminal offence, e.g. fraud.   Other types of financial conduct – during the divorce Dragging out the divorce proceedings, or running up needless and excessive legal costs: This isn’t usually reflected in the financial settlement. Instead, the court can order the guilty spouse to pay some or all of the other spouse’s legal costs; Hiding assets or lying about your financial situation and not giving proper financial disclosure: This commonly happens, the most high profile example being the Supreme Court cases for Alison Sharland and Varsha Gohil. Rather than changing the financial settlement, the court can do one or more of the following: Assume, when making a final financial decision, that the guilty spouse is much more wealthy than they say they are; Order the guilty spouse to pay some or all of the other spouse’s legal costs; If the lying is discovered after a final decision, setting aside that decision or financial court order and starting all over again.   Examples of non-financial conduct It is less easy, but not impossible, for the court to change the financial settlement as a result of conduct which does not have a direct financial effect. The fact that one spouse has had an affair, or the usual arguing and name calling that often accompanies marriage breakdown will not normally be considered serious enough to be ‘conduct’.   Examples of non-financial conduct which have changed an award are: violent or sexual assaults on the spouse, children or close family members; refusing to move in with a spouse after marriage; continued serious harassment of spouse’s new partner; Inability to give spouse respect and affection.   How much does conduct change the financial settlement? The impact of the conduct on the financial settlement will vary greatly, and entirely depends upon the particular circumstances of the case. Often, the person guilty of the conduct will already be in a bad position, for example in jail or having lost their job. However, even in those cases, the court can decide to reduce or even ignore that person’s financial needs because of their conduct.   I have more than 20 years’ experience as a Manchester divorce solicitor and have dealt with pretty much every example of conduct and unreasonable behaviour you can think of. If you believe that conduct is a relevant issue to you and your divorce, call me on 0345 222 8 222 or email me at robin@evolvefamilylaw.co.uk .Manchester divorce solicitors Manchester divorce solicitors at Evolve Family Law in Whitefield are experts who offer a friendly and solution focused family law service. Call us on 0345 222 8 222, complete our online enquiry form or email robin@evolvefamilylaw.co.ukLatest From Our Divorce Blog:
Robin Charrot
Oct 26, 2015   ·   5 minute read