Category: Pensions on Divorce

What is a pension sharing order?

Since divorce pension sharing was introduced in December 2000, pensions have become part of the assets that must be considered during a divorce settlement.

Getting a divorce can be very stressful, with lots of important decisions to be made and paperwork to be filled out during what is already a very emotional time.

One of the biggest tasks that must be tackled is fairly dividing up the couple’s assets. Assets can include property, money, possessions and pensions, anything under a shared name must be considered.

Dividing up a pension
Pension sharing orders are not a compulsory part of a divorce. A pension is an important asset that should be considered during a divorce, but there are different options for dividing it up.
The three main options for dividing a pension are sharing, offsetting and earmarking. A pension sharing order offers a clean break solution.

What is a Pension Sharing Order?
If one party of a divorcing couple has no pension entitlement, then a pension sharing order can be granted by the court to give shared rights to the other party’s pension through a legal arrangement.

How is the pension split?
A pension sharing order does not always require a pension to be split 50/50.

Both party’s assets and finances should be assessed in order to determine how to fairly split the pension. If a decision cannot be reached, then it will be down to the court to decide.

Why do I need a pension sharing order?
If a couple decide that they wish to share a pension, then even if they can amicably agree the percentage split, they will still need to apply to the court for a court order.

This is because pension providers and pension schemes are not allowed to divide or transfer a pension without direction from a court.

For further help or advice with dividing a pension during divorce proceedings, speak to our team of family law specialists here at Lund Bennett by giving our team a call on 0161 927 3118.

One in 10 Couples Consider Divorce According to Research

According to research from Relate, one in 10 couples consider divorce at some point as everyday stresses take their toll on relationships.

While not every couple who consider divorce actually end up going through with it, many end up drifting towards divorce when relationships could have been saved. The research includes both married and co-habiting couples. Overall the findings suggest that 1.4 million families are already at their breaking point.

The most common problems triggering thoughts of divorce include the stress of parenting and financial pressures. The latter has been a major issue in recent years as people have struggled following the recent recession and the knock-on effect this has had on family finances.

The ultimate decision on whether or not to divorce depends a lot on individual circumstances and the reasons given. Often marital difficulties can be sorted out with counselling. Couples have the opportunity to seek help before differences become entrenched and there is little hope of saving the marriage.

It is also important to consider the wellbeing of children who can suffer just as much from being caught in the middle of conflict in a relationship as they would if their parents were to divorce.

Pension reforms may have unintended consequences for divorcees

A pension earmarking order provides an ex-spouse with a fixed percentage of the pension income. According to Old Mutual Wealth, a large financial services company, a consequence of the recent pension reforms is that any divorcee with a pension earmarking order may need to act fast to protect their benefits.

Those with the benefit of a pension earmarking order which pays them a fixed percentage of the pension income should check immediately to see if their rights are protected now that the member no longer needs to take their pension as income and can decide to withdraw all their pension as cash. If the member takes their pension as a cash lump sum, then the ex-spouse with the benefit of an earmarking order may not receive their correct entitlement.

If you are in possession of an earmarking order it is vital that the wording of an earmarking order protects individuals from this. It is important to act promptly, especially if your ex-spouse is approaching retirement age, to check that your rights are protected. It is strongly recommended that you seek legal advice to ascertain whether any amendments can be made to the order. Our specialist team can advise on financial provision and pension settlement in divorce proceedings. Consulting our specialist lawyers in our Altrincham or Manchester offices is a great first step. Please contact us on 0161 927 3118 for a free 20 minute consultation.