Pension Sharing
Divorce can create financial difficulties where independent financial advice is vital, particularly with regards to the division of pension benefits.
There are three ways of handling the division of pension rights in a divorce:
Offset - The court can decide to allow one partner to keep their pension and award the other partner a greater share of the family home, for example, to 'offset' the value of the pension.
Earmarking - The court can also earmark one partner's pension. This means that when the pension finally pays out, in 20 years or so, part of the pension is reserved for the other partner. The downside with this option is that having divorced your husband or wife, you are still "connected" until such time as your former spouse access their pension benefits. Furthermore, if they choose to retire late, you have to wait longer - and if they die before retirement you can be left with nothing.
Pension Sharing - On divorce, a spouse can now be awarded a portion of their partner's pension fund which can then be transferred to a seperate pension plan. This means that one spouse can lay immediate claim to a percentage of their partner's pension pot and that there can be a cleaner break in the divorce. Furthermore, it allows each partner more direct control over their finances. Pension schemes will have to make a cash transfer available so that the other spouse can start a new fund.
The specialist pension advisers at Focus have significant experience in this complex area and work with the legal profession on a regular basis to acheive a fair outcome for our clients who find themselves facing this often difficult situation.
Other services we can offer which you may also find useful at this time include:
- Mortgage Advice
- Retirement Planning
- Savings & Investments
- Personal Protection
There are three ways of handling the division of pension rights in a divorce:
Offset - The court can decide to allow one partner to keep their pension and award the other partner a greater share of the family home, for example, to 'offset' the value of the pension.
Earmarking - The court can also earmark one partner's pension. This means that when the pension finally pays out, in 20 years or so, part of the pension is reserved for the other partner. The downside with this option is that having divorced your husband or wife, you are still "connected" until such time as your former spouse access their pension benefits. Furthermore, if they choose to retire late, you have to wait longer - and if they die before retirement you can be left with nothing.
Pension Sharing - On divorce, a spouse can now be awarded a portion of their partner's pension fund which can then be transferred to a seperate pension plan. This means that one spouse can lay immediate claim to a percentage of their partner's pension pot and that there can be a cleaner break in the divorce. Furthermore, it allows each partner more direct control over their finances. Pension schemes will have to make a cash transfer available so that the other spouse can start a new fund.
The specialist pension advisers at Focus have significant experience in this complex area and work with the legal profession on a regular basis to acheive a fair outcome for our clients who find themselves facing this often difficult situation.
Other services we can offer which you may also find useful at this time include: