Did you know that when couples divorce, pensions can be one of the most valuable assets to consider?
Many people are unaware that pensions can be shared as part of a divorce settlement. When a couple decides to end their marriage, they need to divide their assets fairly. This includes not only property and savings but also pensions. Pensions are often overlooked, but they can represent a significant portion of a couple’s wealth, especially for those who have been married for many years.
Pension sharing allows a portion of one spouse’s pension to be transferred to the other spouse. This creates a separate pension pot for the receiving spouse, giving them independence in managing their financial future. The amount to be shared is usually expressed as a percentage of the pension’s value.
It’s important to note that pension sharing applies to most types of pensions, including workplace pensions and personal pensions. However, the basic State Pension cannot be shared, although the additional State Pension can be in some cases.
The process of pension sharing can be complex, which is why courts sometimes instruct pension sharing experts to provide detailed valuations and advice. These experts can help ensure that the division is fair and takes into account factors such as the type of pension, its value, and the couple’s overall financial situation.
It’s essential to understand that pension sharing is just one option for dealing with pensions in divorce. Other options include pension offsetting (where the value of the pension is offset against other assets) and pension attachment orders (where a portion of pension income is paid to the ex-spouse when the pension comes into payment).
Given the complexity and long-term financial implications of pension sharing, it is crucial that individuals seek professional legal advice when considering divorce, especially if pensions are involved.
Our qualified family solicitors can guide you through the process, help you understand your options, and ensure that your interests are protected.
