Pensions are often one of the biggest assets in matrimonial disputes. People can feel particularly possessive of their pensions and seek an outcome that provides that their spouse does not receive a portion of their pension, even if this means that they receive a different asset instead.

Pensions are one of the most complicated subjects within matrimonial breakdowns. An appropriate settlement depends on a combination of issues such as; pension type, value, if pension is in payment, number of pensions, state pension, tax and what pensions your spouse has. Often solicitors need to work with financial experts or actuaries to determine an appropriate figure that will meet the parties’ requirements.

Pensions: to Share or Not to Share?

There are 3 options when trying to deal with pensions in a financial dispute after a matrimonial breakdown.

Pension Sharing

This is the most common method of dealing with pensions. If there is a pension sharing order in favour of your spouse then this means that a percentage of your pension pot will be withdrawn and placed into the pension pot of your spouse’s choice. Once that transfer has been made each of you have your own pensions with no further link to the other’s pension.

Pension attachment

This is now the rarest method of dealing with pensions. If there is a pension attachment order in favour of your spouse then this means that when you start to take your pension a percentage of your pension payments will go to your spouse. This means that your spouse is reliant on you for their pension income. This is unpopular as it relies on the individual with the pension staying alive as once they are dead the pension payments stop.

Offsetting

This is where there will not be an order as per options 1 or 2 above. Instead, the parties agree that the individual with the smaller pensions will receive a larger share of another asset to ‘offset' the claim that they have against their spouse's pensions.

One of the starting points is to obtain a CEV (Cash Equivalent Value) from your pension provider. This gives an estimated gross figure of the value of your pension in cash on that particular day. This is often used for negotiation purposes. However not all pensions can provide this. Final Salary Pensions rarely produce CEVs.

Another point to consider is whether or not your pension provider will charge you for implementing a pension sharing or attachment order. If the charges are high then this could impact on whether you want to offset or which pension you choose to share.

Once you have recent figures for all of your and your spouse's pensions, including both of your state pensions, then you have a full picture of the situation which will enable negotiations to take place whether in mediation or via solicitor. Sometimes negotiations can break down and you may find that you are in Court proceedings or attending arbitration, either way, this information will be vital.

Pensions & Divorce Legal Advice Hampshire, Wiltshire & Surrey

We are a down to earth firm of family law experts, with a friendly, human approach to legal services. We provide fair and workable solutions that put families first, with a particular focus on child law, we advise on all areas of family law, including financial disputes, prenuptials, divorce, separation and dissolution of civil partnerships.

For guidance and representation on any social care or family issues you may have, speak to one of our team. Child Law Partnership have offices in Guildford, Basingstoke, Southampton and Salisbury helping families across Hampshire, Surrey, Wiltshire, Reading and the surrounding areas. We offer a fixed fee initial appointment where you can receive full advice with a follow up in writing in order that you can consider your options. Give us a call on 01256630080 or complete our enquiry form.

Child Law Partnership have offices in Basingstoke, Guilford, Southampton and Salisbury serving clients across Hampshire, Surrey and Wiltshire.

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