Pension and divorce

Pension and divorce

Can we do anything with the pension?

Along with the house, the pension pot is one of the largest financial assets in the family.  You & your spouse might have a mix of his, hers, theirs and yours but all need to be correctly valued and assessed within the context of an emotional and economic family breakdown.  You have to begin by assessing what you actually have in the pot and when you might be able to access that pot.   Providers seem to be slow at the moment (Feb 2022)  in producing the required valuation  but you’ll need this to make a start.  And you have to read the small print – so if you don’t fancy doing it yourself, ask a lawyer who will!  Once you understand the asset, you then need to consider how it could be shared upon divorce.

Offsetting

Pension offsetting is where one person keeps their pension in exchange for giving up another asset, such as the family home.

Pros: This approach is relatively straightforward and allows the parties to have a clean financial break from each other upon divorce.

Cons:  This is more straightforward with a private pension than with an occupational pension.   The party who forfeits the other’s pension may lose out.  After all, a pension is generally designed to produce an income rather than be a savings  account.

Pension sharing order

With pension sharing, a percentage of one person’s pension is transferred to the other.

Pros: Both parties end up with a separate pension.

Cons: It’s relatively complex initially. You may need financial advice (which comes at a cost) to improve your chances of getting a fair split, especially if its an occupational pension under scrutiny.

Pension attachment order

One person pays an income or lump sum to the other when they start taking their pension.

Pros: Like pension sharing, it can result in a fairer split of the pension.

Cons: An attachment order essentially a form of maintenance paid to the former spouse, so it doesn’t allow for a clean break. The pension-holder retains control over the choice of investments and when the payments to their ex-partner are made.  These do not seem to be very popular yet in the right circumstances, they could be very reassuring as there is less risk of default.

As ever, your solicitor is here to help – just ring up or send an email and book an appointment.

Our Family Team at Colchester and Dunmow are available for appointments so please do give us a call either at the Colchester office on 01206 577676 or our Dunmow office on 01371 873277.

Any email enquiries can be sent to [email protected]

For more information on Divorce

Contact either of our offices, Colchester 01206 577676 or Dunmow 01371 873277 or you can email [email protected]

New divorce rules – trouble by another name?

New divorce rules – trouble by another name?

New divorce rules – trouble by another name?

​Whilst it is true that on the one hand, the new Divorce, Dissolution & Separation Act 2020 – up and working from 6th April – should remove animosity from the equation owing to the fact that the divorce can be achieved without having to allocate blame for the break-up, the rules which aim to facilitate this new legal spirit of amity still allow for foul play.  I’d like to think  this was not the deliberate intention of those responsible for the drafting as the whole point of the new law was/is to try to avoid contentious issues and its consequent expense and complexity.  So, whether the rather loose drafting is down to haste, lack of thought follow-through or sheer mischief remains a matter for speculation. 

When an application for divorce is issued (note that after 6th April it is not a petition, but an application), the court dealing with an application must take the statement that the marriage has broken down irretrievably to be conclusive evidence that that is so and make a divorce order.   The person wanting the divorce can apply first for the conditional divorce order at the end of a period of 20 weeks from the start of proceedings and then apply for the final divorce order 6 weeks after that.

Aside from the fact that there are few remaining circumstances where the breakdown can be disputed, the main problem is this ‘start of proceedings’.  It is not 20 weeks from service of the divorce application on the other party to the marriage, it is 20 weeks from the start of proceedings, which is presumably the submission of the application.

Best practice is for the person wanting the divorce to send the application to the other party within 28 days of issue so that the other party has plenty of time to think about what is happening.   But what if they don’t?  The potential exists within the rules as drafted for a married couple to go about their lives as usual whilst all the time, one of them has issued a divorce application but has not yet told the other about it and doesn’t intend doing so until just two weeks before the conditional order is due to be declared.  That leaves very little time for that other party to take advice and act on that advice.

This is particularly concerning where the ending of the marriage may have significant financial consequences for either party – say, termination of matrimonial home rights and widows pensions – and I foresee a situation where swift action will be required in order to prevent loss of said housing rights, or pensions.

It will be interesting to see if, how and when, the rules may be amended or what guidance is given to the judiciary to cope with this very situation.

So, as ever, the moral of the story is seek advice from a solicitor as soon as possible!

Our Family Team are available for appointments so please do give us a call 01206 577676.

Any email enquiries can be sent to [email protected]

For more information on Divorce

Contact either of our offices, Colchester 01206 577676 or Dunmow 01371 873277 or you can email [email protected]