If you are concerned about your finances going into a marriage, it could be a sensible decision to sign a pre-nuptial agreement (or prenup). This can protect your assets in case of a relationship breakdown and prevent you from potentially losing significant...
Divorce and pensions can be a difficult legal area to interpret and handle, which is why it’s vital that you access support from a specialist lawyer, who can assist you to establish your preferences, obligations, and rights, and navigate matters with ease.
Our experienced divorce and pension solicitors can provide comprehensive help, assisting you to divide your finances when getting divorced or dissolving your civil partnership. We appreciate that you’ll want to safeguard your financial interests, and reach a settlement swiftly, we can help you to ensure that this process runs as smoothly as possible.
There are several different ways that a pension can be divided when a couple dissolves their civil partnership or gets divorced. Our solicitors can assist with all of these, including:
- Divorce and pension legal advice
- Divorce and pension Court proceedings
For pension divorce advice today, our solicitors at Bakerlaw can help. You can contact your local BakerLaw office or email us at enquiries@baker-law.co.uk.
Divorce and pension legal advice
Our experts at Bakerlaw can provide expert divorce and pension legal advice to help you to protect and divide your pension whilst going through a divorce. We can help clients to understand their pension rights after separation, assisting with a variety of related legal tasks and considerations, including:
- Assisting you to assess the value of the pension, and to understand the implications and particular features of your pension
- Assessing your financial settlement preferences and needs as a whole and providing advice on how to best protect your interests
Dividing your pension
When you are working towards a financial settlement, there are various methods of dividing your pension. The method chosen will depend on various factors including the financial circumstances and preferences of each party, as well as how easily they can negotiate and cooperate on pension matters.
Our divorce and pensions solicitors can assist divorcing couples with viable options such as:
Pension sharing
When a pension sharing order is made, pension benefits are divided between the couple at the time of divorce and a legal transfer of ownership of benefits is made from the pension scheme member to the ex-spouse.
Sharing may be favoured where:
- It is preferred to the division of other assets
- The ex-spouse has no pension rights of his or her own and is unlikely to be able to build up pension rights after the divorce
- The CETV is relatively significant and can justify the cost of the sharing arrangements
- The ex-spouse has more need of retirement income and property rights
- Pension rights form a substantial element of the family wealth
- There are no assets against which pension rights can be offset
A pension sharing order specifies what proportion of the benefits is to be transferred. This will be expressed as a percentage of the cash equivalent transfer value. The pension then becomes subject to a debit of the appropriate amount and the beneficiary becomes entitled to a corresponding credit.
The pension debit will reduce the member's rights under the pension scheme by the percentage shown in the pension sharing order. The benefits will be those accumulated up to the transfer day. All benefits accumulated after the transfer date will not be affected.
Pension Offsetting
This is where the value of the pension is off-set against other matrimonial assets. For instance a husband may prefer to keep his pension and a wife may prefer to keep the matrimonial home.
Offsetting may be favoured where:
- The CETV is so small that it is not worth considering attachment or sharing
- Each partner has equal or sufficient pension rights of their own and it is unnecessary and costly to opt for attachment or sharing
- The priority for a wife and young children is to secure the matrimonial home
- The parties are young and have good prospects of building up pension benefits in their own right after the divorce
Pension Attachment Orders (Earmarking)
Attachment orders are a direction by the court to the pension trustees to pay part or all of the members pension benefit to the ex-spouse on retirement or death. An attachment order does not transfer legal ownership or control of the benefits from a pension member to the ex-spouse.
Pension Attachment orders are a form of deferred spousal maintenance and therefore payments would cease on the remarriage of the recipient ex-spouse. They would also cease on the death of the pension scheme member.
Whilst unusual, attachment may be favoured in the following circumstances:
- Where the need is to continue to provide lump sum life cover, perhaps for an ex-wife with young children or in the case of an older couple, close to retirement
- Where the need is for a tax-free lump sum to be paid to the ex-spouse on the member's retirement.
- Where the attachment order is to be used as a way of providing maintenance in retirement without ownership being transferred
- Where the pension provider recognises the spouse as a financial dependant for the payment of spouse's pension.
Divorce and pension court proceedings
Most of the time, you will not need to go to court to divide your pension as part of financial settlement proceedings. Yet, there may be some cases when going to court becomes necessary. In these situations, you will need the court to assess your case, allowing you to obtain a financial order, as part of a divorce financial settlement.
This might be the case if, for example:
- The spouses have tried and failed to divide their pension using alternative dispute resolution methods
- The financial circumstances are more complex, for example, offshore assets or several pensions
No matter how complex your needs are, our divorce and pensions solicitors can help you to navigate pension entitlement, providing the assistance that you need.
Frequently asked questions about divorce and pensions
How are pensions treated in divorce?
Pensions are usually divided as part of a divorce settlement. How pensions are treated in the context of a divorce largely depends on the circumstances as there are many different scenarios and options.
The most common method for dividing a pension in a divorce is Pension Sharing.
Pension Sharing refers to an option whereby one spouse transfers a set portion of their pension to the other, the spouse who receives the transfer then essentially has their own separate pension, and manages this independently.
Pension Offsetting means that one party keeps the entirety of their pension, and the other consequently receives a greater portion of other substantial assets, for example the couple’s savings, or the family property.
Pension attachment orders are much less common, but could be used in some limited circumstances.
Our pension law solicitors will start by assessing your circumstances, and determining your needs, allowing us to ascertain the most appropriate option.
How do I protect my pension in a divorce?
If you would like to protect your pension during a divorce, the best thing that you can do is to contact a specialist divorce and pensions solicitor who can provide expert advice specifically tailored to your circumstances.
Our solicitors at Baker Law can provide various types of guidance regarding divorce and pensions, assisting you to protect your interests during a divorce, including:
- Providing pension protection legal recommendations based on your circumstances
- Assisting you to complete a full financial disclosure, including information about your pension
- Advice on the pension dividing options that would be most viable and suitable for you, depending on your situation
Is my spouse entitled to half my pension after divorce?
When assets are divided as part of divorce proceedings, no party is automatically guaranteed to receive half of their spouse’s pension. How pensions are divided is based on various factors. The court will always aim to reach a fair division of assets, according to the unique financial and personal circumstances.
If you are concerned that your spouse may receive a larger portion of your pension than you would like, and therefore require legal advice on protecting your assets, please get in touch with our experts at Baker Law.
What factors does the court consider when dividing pensions?
When the court is dividing pensions as part of a divorce settlement, there are various factors that will be taken into consideration, these include:
- The financial position, earning capacity, and financial needs of each person, as well as the needs of any children
- How long the couple have been married
- The value of each party’s pension
- How much each person has offered contribution to the marriage, in terms of caregiving for any children and contributions to the home, as well as financial contributions and savings
- The standard of living each experienced by both, and how far each individual will be able to maintain a similar living standard after the divorce
For more information on pensions and divorce, and to find out how we can help, please get in touch using the contact details below.
Contact our divorce and pension solicitors in Farnham for a free initial 30-minute appointment.
If you are looking for expert advice regarding your pension, please contact our solicitors at Baker Law.
You can contact your local BakerLaw office or email us at enquiries@baker-law.co.uk.