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Divorce & Pensions

Experts on Pensions & Divorce Settlements

We are Divorce Pension Solicitors with the expertise to resolve divorce and pension financial claims. We take a personal approach to your divorce.

Pension experts

No two pensions are the same, even if pension administrators provide a similar fund value for each pension. That’s why when it comes to divorce and pensions your interests need protecting by divorce pension experts. The expert team of highly experienced divorce financial settlement lawyers at Evolve know that where there is a divorce claim involving a pension it’s important that the true value of the pension is properly investigated and factored into the divorce financial settlement.

Looking after your short and long-term needs

The expert divorce financial settlement solicitors, led by Robin Charrot, have substantial experience in representing spouses and civil partners in financial Court proceedings involving pension assets, whether the pension is a final salary, private pension, NHS pension, police pension, local government pension or SIPP or SSAS. The team not only understands the complexities of pension assets but the importance of considering your short-term housing needs and your long-term retirement needs when it comes to your divorce financial settlement. 

Why choose the divorce financial settlement solicitors at Evolve Family Law?

Partners, Robin Charrot and Louise Halford are experienced family solicitors who take a personal approach to their divorce financial settlement advice. They believe that everyone deserves care and attention to detail and a divorce financial settlement that has considered their goals, priorities and needs in light of their financial and personal circumstances. At Evolve we don’t forget the forgotten family asset; the pension and we will help you understand why pension assets in a divorce can be crucial to a fair financial settlement.

Divorce And Pensions – Your Questions Answered

When a couple takes the decision to separate the financial focus is on who should stay in the family home or whether the house should be sold and, if so, how the equity should be divided. Pensions in divorce are often forgotten or misunderstood or undervalued assets.

Can you make a financial claim against your partner’s pension?

If you are married or in a civil partnership, you can make a financial claim against your partner’s pension if you separate and start divorce proceedings or dissolution of civil partnership proceedings.  

Many spouses and civil partners don’t realise that even though a pension is held in the name of a husband or wife or partner that when a couple gets divorced a claim can be made against their partner’s pension. The Court has the power to transfer all of the pension or a percentage of the pension fund to the non-owning spouse. That is why it is best to get expert divorce pension and family law advice before reaching a divorce financial settlement either directly with your husband or wife or through family mediation.

How do you divide pensions on divorce?

Divorce pension solicitors recommend that you start by listing all the different pensions you and your ex-partner hold including:-

  • Personal pension schemes.
  • Self-invested pension plans (SIPPs).
  • Schemes you have through your employment such as final salary or defined contribution schemes.
  • Small self-administered schemes (SSASs).
  • Previous work and employer schemes.
  • Additional state pension.

You or your divorce pension solicitor then need to get a value for each pension fund. You will need to get this information whether you are sorting out a financial settlement through family mediation, solicitor negotiations or if one of you starts financial Court proceedings.

How are pensions in divorce valued?

Only the person who is a member of the pension scheme or who has taken out the pension (or their financial settlement solicitor) can ask for a valuation of their pension fund. It can take time to get a pension valuation so it is best to contact the pension administrator to ask for a valuation as soon as you know that you need one.

In divorce or civil partnership dissolution proceedings pensions are valued by the Court using the cash equivalent transfer value of the pension fund. This is the amount that the pension owner would get if they moved the pension to a different pension provider. The cash equivalent value may be less than the fund value of the pension because it will include charges for transferring the pension.

The owner of a pension is entitled to one free cash equivalent transfer value each year from the pension provider.

Can you get a pension valuation if your partner won’t agree?

If your ex-partner takes legal or financial advice from a pension and divorce solicitor, they will be told why it is important that they provide full financial disclosure, even if they are arguing that the value of their pension funds should not be taken into account in the divorce financial settlement. If your husband or wife still won’t give you the written valuation of their pension fund then you have the option of starting financial Court proceedings. The Court rules state that pension information has to be provided. If the information isn’t made available the Court can make financial disclosure Orders to get the information.

Are cash equivalent transfer valuations of pensions accurate?

The cash equivalent transfer value of a pension pot isn’t necessarily accurate. The accuracy of the transfer value may depend on the type of pension scheme. If you or your spouse or civil partner have a final salary or other salary-related pension scheme or SSAS getting an accurate valuation can be more complicated. You should ask your pension provider if they can provide you with a cash equivalent transfer value but be aware that this rarely reflects the true value of some pension schemes.

The potential value of pension assets is often ignored by separating couples as the money is not instantly available unless you are of retirement age. However, the value of pension funds can be the main family asset so it is vital that the pensions are properly valued. That way your divorce financial settlement solicitor can negotiate a fair financial agreement or the Court can make a Financial Order.

Pension valuations are a complex area and you may need expert help from a divorce solicitor as well as a pension actuary or financial advisor to understand the true value of the various pension funds and your options. It is preferable to get specialist pensions and divorce legal advice because, if you reach a financial settlement, you are unlikely to be able to reopen any claims over pensions at a later date, such as when you reach retirement age and fully appreciate the value of the pension fund that you either let go or didn’t make a claim against. 

Is a pension relevant to the divorce financial settlement if the pension was taken out before the marriage?

The relevance of pre-marriage pension contributions to the divorce financial settlement depends on a range of factors, including your and your ex-partner’s current and future needs, the length of the marriage and financial and homemaker contributions to the family. Whether there is a prenuptial agreement can also be a very important factor.

It is important that the value of all pensions is obtained, even if you or your ex-partner then wants to argue that some or all of the pension funds should be ring-fenced or ignored in the divorce financial settlement.  Without a valuation of the pension and the other family assets, you and your ex-partner won’t be able to reach an informed financial agreement, which may or may not include ringfencing some assets.

If a pension forms part of a family business, can it be shared?

A lot of small family business owners decide to put assets, such as company buildings where they operate the family business from, into a small self-administered pension scheme (SSAS). The SSAS members are normally the business shareholders.

SSAS pensions can appear complicated but the assets in the SSAS pension fund should be valued and a percentage value attributed to each pension scheme member. The SSAS pension administrator can be asked to provide information and, if necessary, independent property and pension reports can be obtained.  Once a valuation and the scheme rules have been received your divorce pension solicitor can look at the options of sharing the pension fund or one of you getting a greater share of other family assets. 

How do you divide pensions on divorce?

There are a number of ways in which a pension can be shared or taken into account in a divorce financial settlement namely:-

  • Pension Sharing Order
  • Pension Attachment or Earmarking Order
  • Offsetting

With pension sharing, you get a percentage share of any one or more of your ex-partner’s pensions. The percentage amount can range from one-to-one hundred percent of the value of the pension fund. This value is either transferred into a pension in your name or, depending on the rules of the pension scheme, you can join your ex-partner’s pension scheme. If the pension is transferred to you and you don’t already have your own pension then your financial advisor can help you set one up.

With pension attachment or earmarking a proportion of the pension is paid to the non-pension member. The difference between pension sharing and pension earmarking is that the pension attachment or earmarking stops if the person who is getting the benefit of the pension order remarries. As a result, pension earmarking orders are rarely made.

With pension offsetting the value of any pension is offset against other family assets. For example, you or your ex-partner might get a larger share of the equity in the family home or the savings in return for you or your ex-partner keeping more of the pension assets. Balancing the value of the pension against another asset, normally the house or cash savings is simple but not always ideal, depending on the type of pension fund. This is because one pound of pension is not always equal to one pound in the house or savings. If you take the house you need to calculate how much retirement income you can accumulate in your own right either by saving or releasing equity later.

As there are always a number of different ways assets and pensions can be divided on divorce it is vital that all the assets and pensions are valued accurately so you both know what is available to share and you both understand the various options and the pros and cons of getting a pension sharing order or offsetting the value of all or some of your ex-partner’s pension funds.

If a pension sharing Order is made will my ex-partner get the benefit of my continued pension contributions?

If your pension continues to grow in value as a result of your contributions or the stock market rises then, until the pension sharing Order is implemented, your ex-partner will gain as he or she will get a percentage of the value of the pension fund.

Once the Pension Sharing Order has been made the pension scheme has four months to implement the Order. Once the order has been put into effect any further pension contributions won’t be shared with your ex-partner as you will both have separate pension funds.

How should we split the value of the combined pension funds?

The cash equivalent value of the pension fund is not always an accurate way of valuing a pension. By splitting the funds equally one of you may end up with more pension income on retirement than the other even though you have split the pension funds equally. That is why some couples need professional pension advice from a pension and divorce lawyer to look at the figures behind the cash transfer value.

Can more than one pension sharing Order be made?

If you or your husband or wife has a number of pension funds then each pension could be made the subject of a pension sharing Order. This is provided that each pension hasn’t already been made the subject of a pension sharing order in favour of an earlier ex-spouse. The sharing of every pension may not be the best option as most schemes charge to implement a pension sharing Order. Therefore, it may be more economical to only share some funds, and still achieve an equal split of pension assets. Much will depend on the type of pensions you have and their value.

If a pension is in payment can a pension sharing Order be made?

If you or your ex-partner have retired then your pensions can still be shared but the rules are different. It may not be possible for the partner who is taking a share of the pension to immediately draw down on the pension, even if their ex-partner is getting a retirement income from the pension fund. That is why it is important that pension scheme rules are checked and that you get specialist family law advice from pensions and divorce solicitors.

Is a Financial Court Order needed to share a pension?

Only a Court can make a Pension Sharing Order or a pension attachment or earmarking Order. A pension administrator can’t implement what you have agreed over the pension funds without a Financial Court Order and your final Order of divorce or final Order in the dissolution of civil partnership proceedings.

If you have a pension sharing agreement reached through family mediation or direct with your ex-partner, Evolve can prepare the Financial Court Order and the divorce paperwork so that the pension agreement can be implemented.

Can a pension sharing Order be made after a divorce financial settlement?

If you agreed on a clean break Financial Court Order you won’t be able to secure a pension sharing Order at a later date unless you can show that your ex-husband or ex-wife didn’t disclose assets or pensions or in other very limited circumstances. If you have a spousal maintenance order or are you are paying spousal maintenance to your ex-spouse the Court can either order a lump sum cash payment instead of ongoing spousal maintenance payments or a pension sharing Order.