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.