Pensions and Divorce

Specialist Service Offering

The number of people divorcing in the UK later in life is increasing, and it is not just putting couples under emotional strain, but it is also potentially harming their retirement plans.

 

Sancus Retirement Planning Limited are members of Resolution and are vastly experienced in writing reports for the courts and or acting for divorcing individuals post settlement. We absolutely get that this is a difficult time for all concerned, and so having the calm input and sensitivity of a professional pension advisor with years of experience in this field is well received by existing clients.

 

Achieving a fair resolution of all the financial issues surrounding divorce, or the dissolution of a registered civil partnership can be highly stressful. Alongside wanting to resolve these effectively and affordably, you may also be worrying about how you will achieve the fairest division of your family assets, how to deal with any requirements for continuing support - or perhaps even how you will manage to make ends meet in the future.

 

After a home, a pension fund can be the second largest asset owned by a family. A pension plan is usually valued in terms of its transfer value at the time of any divorce proceedings. It is valued in this way either to be shared, or to offset any assets awarded to either partner. It is not always prudent to assume all assets will be divided in half, and in many cases that does not occur.

 

A partner who has sacrificed their income in the course of a partnership (for example, in order to care for children) could expect to benefit from any pension earned by their partner while the relationship lasts. In the case of divorce, however, this would no longer be the case, and hence the fate of any pension accrued will have to be decided either between the partners or via legal proceedings.

 

The 2014 Budget changed the financial planning landscape dramatically with the single biggest shake-up to pensions in our lifetimes. The announcement that “no one will have to buy an annuity” turns the personal pension plan from an intangible and illiquid future income stream into a savings account with unrestricted access.

 

For people negotiating their divorce now, there needs to be an immediate re-evaluation of their pension’s worth. In England, Wales and Northern Ireland, a court has to take into account any pensions and pension rights that you, or your spouse or registered civil partner have when you split up. In Scotland, any increase in the value of your pension(s) between the date you married, or became civil partners and the date of separation will be taken into account.

 

Following the introduction of pension sharing on divorce, specialist pension advice will be required at various stages and will depend whether a client is the 'debit spouse' or 'credit spouse'. Initial advice will be required on the implications of each option i.e. offsetting, earmarking and pension sharing.

 

After the divorce the “debit spouse” will require advice to resolve the problems created by depletion of their pension benefits.

 

For the “credit spouse” advice will be needed on the options of how and where to hold the pension credit.

 

At Sancus Retirement Planning Limited, we have the experience and expertise to provide advice to either 'debit' or 'credit' spouses and will analyse all the potential options to identify a solution that is in the best interests of our client.

 

For lawyers and potential clients please contact info@sancusrp.co.uk for more information, help and guidance on our dedicated Pension and Divorce Service.