Retirement Planning

Pensions and Divorce

Divorce is probably the last thing you want to worry about, however, since 2 in 5 marriages end in divorce, the splitting of pension assets is a regular occurrence and we can give you the best advice and guidance if you need it.

Behind a home, a pension is most likely to be the highest value asset a couple will share. If you’re going through the divorce process, then getting expert advice on your pension split on divorce is crucial.

Prismatic Wealth are retirement planning specialists who can help advise you on the best course of action if you are getting divorced and need to split a pension.

What Is Pension Sharing?

A pension sharing order is the legal way to divide a pension between a couple after divorcing or ending a civil partnership.

Divorce can be a very emotional, stressful and difficult time. We understand the delicate nature of the divorce process and are able to provide the best level of care and service to help you through the pension sharing process.

Pensions You Can Divide

It is important to make a list of pensions that you and your ex-partner (or soon to be ex-partner) have along with up to date valuations.

Our team can provide all the information you need.

Splitting Pensions – How To Do It

We’ve prepared the below table to show how pensions can be shared when divorcing.

You should seek legal advice when considering pensions and divorce.

Pension Sharing

You receive a percentage of any one (or more) of your ex-partner’s pensions. This can be transferred into a pension under your name, or you can join your ex-partners pension scheme.

If the pension is transferred to you and you don’t already have a pension of your own – you will have to set a pension up under your own name.

Pension Offsetting

The value of any pensions if offset against other assets. This means you may get a larger share of the family home, in return for your ex-partner keeping full share of their pension.

Deferred Pension Sharing

This options requires you and your ex-partner to make an agreement to share the pension at a later date. This can be more complex to arrange than an ordinary pension sharing order. This option carries higher legal costs due to the complexities of this option.

Deferred Lump Sum

When your ex-partner retires you receive a lump sum payment from their pension.

Pensions Attachment Order

You receive some of your ex-partner’s pension when they start to receive their pension payments.

You can receive some of the pension income, a lump sum or both. You must wait until your ex-partner starts to take their pension.

 

Splitting pensions you have retired

If both you and your ex-partner have retired, pensions can be split, but the rules for doing so are different.

In this scenario, it is not possible to take a lump sum from your ex-partners’ pension pot, if they are receiving an income from it.

Basic State Pension

You cannot split your basic state pension if you divorce.

You may, however, be entitled to claim a basic state pension under your ex-partners NI record. You can do this if their record was better than your own during marriage.

In order to claim this you must reach state pension age.

Remarrying or entering another civil partnership before you reach state pension age means you lose this entitlement.

Next Steps

Get in touch with us today, so we can star to help you with your pension sharing order.

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