7 minute read
Date Published - December 3rd 2024
Dividing assets during a divorce can often feel overwhelming, especially when pensions are part of the picture. As one of the largest financial considerations in a settlement, pensions require careful thought to ensure a fair outcome. From how they’re typically divided to what happens if you remarry, understanding the process can help you feel more in control.
Below, we address some of the most common questions about pensions in divorce and how they’re managed.
Dealing with pensions in a divorce can feel complicated, but GloverPriest’s experienced Divorce and Financial Arrangement solicitors are here to guide you. We provide clear, practical advice tailored to your situation, helping you secure the best possible outcome. Contact us today to learn more.
When it comes to dividing pensions during a divorce, there are three main approaches that can be used to ensure a fair settlement:
Pension sharing is the most common way to divide pensions. With a pension sharing order, a portion of one party’s pension is transferred to the other. This can be moved into an existing pension pot or a new plan set up specifically for this purpose. The court decides what percentage split is fair, ensuring both parties have independent control of their share, which they can access when eligible.
Pension offsetting balances the value of the pension against other assets, such as property or savings. For example, one spouse might retain their full pension, while the other receives a larger share of the family home or a lump sum of money. This option can work well if dividing the pension directly isn’t the best fit for your situation, allowing each party to focus on the assets most important to them.
This is less common but still an option. It allows one spouse to receive payments directly from the other’s pension when it comes into payment. However, this method is considered riskier. For instance, if the pension holder dies before retirement, the other party could lose access to the funds. Because of these risks, pension attachment is rarely used compared to the other options.
The best option will depend on your financial circumstances and future needs. At GloverPriest, our expert solicitors can guide you through the process and help you achieve a fair outcome. Contact us today for tailored advice on dividing pensions during divorce.
If you and your husband separate, you may be entitled to a share of his pension but this would depend on whether you go through a formal divorce and your personal circumstances.
In the UK, pensions are often viewed as part of the marital assets and may be included in the financial settlement during a divorce. When deciding how a pension should be split, the court takes into account all the points listed in the Matrimonial Causes Act 1973. This includes the needs of any children, the financial responsibilities and expectations of each party, future earning potential, the length of the marriage, how much each person contributed to the marriage and the other assets they have.
If you’re separating but not divorcing, your rights to your husband’s pension might be more limited unless you’ve got a legal agreement in place.
No, pensions don’t always get split in a divorce. This is mainly because couples consider property and other assets as more important and part of the marital pot and perhaps feel unentitled to the other person’s pension because it is what has accumulated over time whilst working.
In a divorce, parties can decide between themselves how best to split their assets fairly. Sometimes, couples are able to come to arrangements with the help of their solicitors without having to go to court. Some couples go to mediation sessions which can help them come to amicable agreements by explaining what they each want out of the settlement. An independent mediator will then guide them in reaching reasonable conclusions that are in the best interests of everyone involved.
Depending on the situation, the couple may decide to keep their own private pensions for instance. If they are able to make a decision between themselves, they are advised to get a consent order to make the agreement legally binding.
In England and Wales, your ex-spouse may still be able to claim a portion of your pension years after a divorce if a financial settlement wasn’t agreed upon and made legally binding at the time of your divorce. Without a formal agreement, such as a Consent Order, Prenup, or Financial Agreement, financial claims remain open, allowing either party to pursue a claim on pensions or other assets later in life.
However, if a financial settlement was finalised during your divorce proceedings, and the division of pensions was addressed - whether through pension sharing, pension offsetting, or no claim at all - your ex-spouse generally cannot make further claims.
The court’s decision will also depend on factors like:
No, a pension sharing order does not allow you to take a lump sum directly. Instead, it transfers a percentage of one party’s pension into a separate pension fund for the other party. This means the recipient gets their share of the pension as a new or existing pension pot, which they can access according to the pension provider’s rules and government regulations.
If you’re looking for an immediate lump sum as part of a divorce settlement, you may want to consider pension offsetting. This approach allows one party to receive a different asset, such as cash or property, in exchange for the other party retaining their pension.
Understanding your options for dividing pensions is essential to making the right decision for your financial future. If you’re unsure which route is best, GloverPriest’s experienced solicitors can guide you through the process.
Whether you are able to claim from your ex-partner’s pension if you remarry very much depends on whether you fall under the new rules or the old rules. This will depend on whether you reached state pension age before 6th of April 2016. According to the current rules, you can receive a State Pension based on your husband, wife or civil partner’s National Insurance contribution at the point of claiming your own pension. However, if you remarry or enter into a new civil partnership before you make it to State Pension age you will not be entitled to receive a State Pension based on your partner’s National Insurance contribution.
The new state pension is designed to focus on your entitlements as an individual. This means that in most cases you will not be able to use an ex-partner's National Insurance record. However, divorced couples can cite their former spouse’s National Insurance contributions as a way to increase the State Pension they receive. Doing this will not affect the State Pension the other person receives.
Anyone that reached the State Pension age before the 6th of April 2016, will continue to receive the State Pension under the old system. Under the old rules, those receiving a widower’s, widow's, or civil partner’s pension will continue to get those benefits for life.
While a divorce or dissolution of a civil partnership does not invalidate any existing Wills you may have, remarrying or entering into a new civil partnership does. You may also lose an ex-partner’s pension benefits if they remove your name as their nominated beneficiary in a private pension plan.
Divorce involving pensions can be a complex and emotional process, with important decisions to be made about dividing assets fairly and planning for the future. At GloverPriest, our experienced Divorce and Financial Arrangement solicitors are here to provide expert guidance, ensuring your financial interests are protected and helping you achieve a fair outcome.
Start your divorce online today by completing this form. Alternatively, call our expert team on 0121 794 5814 for advice tailored to your situation, or use our contact form to request a callback.
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With extensive experience in Family Law, including divorce and financial settlements, GloverPriest Solicitors are here to support you through life’s legal challenges. Our compassionate team understands the complexities of dividing assets, such as pensions, and works to ensure your interests are protected every step of the way.
Family Law encompasses all legal matters affecting families, including divorce, child arrangements, and disputes over finances and assets like pensions. It ensures fair outcomes for all parties involved, with a focus on providing solutions tailored to each unique situation.
Yes, we offer a free initial meeting in certain areas of Family Law, including divorce and financial matters. This consultation allows you to discuss your circumstances with one of our solicitors and understand how we can assist. It’s an opportunity to ask questions, explore your options, and feel confident about taking the next steps.
Absolutely. GloverPriest Solicitors is regulated by the Solicitors Regulation Authority (registration number 597426), ensuring we adhere to strict professional standards. You can trust us to provide clear, transparent advice on sensitive matters like pensions and financial settlements during divorce.
Dividing assets, especially pensions, can be one of the most challenging parts of a divorce. A solicitor can provide expert guidance on options like pension sharing orders or offsetting, helping to ensure a fair settlement. With a solicitor advocating for your interests, you’re more likely to achieve a positive and secure outcome.
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