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]