Love is a battlefield
Posted on Feb 22, 2019
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Divorce can be a battlefield and, often, it is the division of pension wealth which can be used as a weapon. Even in the most ‘civilised’ of proceedings, this can cause a stumbling block.
While most married people regard their accumulated wealth as shared, when it comes to their pension there can be a feeling that it’s something an individual has earned themselves. This tends not to rear its head until a divorce is on the table and, very often, statistics suggest that it’s women who miss out.
The majority of divorces are managed by lawyers – who know about law but aren’t necessarily trained in finance and, in particular, the implications of splitting pensions wealth and the associated tax issues.
This stumbling block has been acknowledged and a pensions advisory group was set up in 2017 to assist family law practitioners who may not always have an in-depth understanding of the treatment of pensions in divorce.
Guidance is due out soon, which could lead to a change in the way divorce pension rights are assessed. At the very least, experts are hoping that it will bring a consistency in approach – as this does not exist at the moment.
Currently, according to the Pensions Advisory Service, there are three outcomes from a divorce:
Pension assets are split at the time of divorce, allowing for each party to decide what to do with their share independently and providing a ‘clean break’.
Some or all of the pension benefits are redirected to the ex-spouse at the time of the payment.
The total value of the pension is taken into account in the settlement, but one party may be compensated through other assets, such as property.
While we spend the majority of our time at The Goodman Partnership supporting our clients in achieving their hopes and dreams in retirement – we can also help during a marriage breakdown. Here in Tunbridge Wells, have the skills and expertise to provide advice on how to deal with or share pension entitlements on divorce.
Please do give us a call on tell 01892 500600 if you’d like to talk about this.