Pension funds can be the most valuable asset you hold and a top concern for those going through a divorce or separation – perhaps not surprising when reassessing what your future might look like.
However, pension funds can be difficult to value and divide. Consequently, confusion and anxiety can arise around exactly who is entitled to what, what this means for your retirement and whether your divorce will have a negative impact on your future financial security.
At Sharp Family Law, we are experts in dealing with the financial aspects of divorce, including complex matters such as pension splitting. We take a sensible, pragmatic approach, combined with sensitivity and tact to help our clients get the right arrangement in place in the right way for their circumstances.
Pension funds can be split in several ways, so it’s worth understanding your options. We can advise on:
- Pension Sharing Orders - where one party receives a percentage share of the other party’s pension fund by way of a credit retained in the pension scheme or transferred out to another.
- Pension Offsetting - where one partner takes a larger share of another asset i.e. the family house, in exchange for a share of their ex-partner’s pension
- Deferred Pension Sharing - where one party has already retired and is using their pension, but the other party is too young to retire. You both make an agreement to share the pension later
- Deferred Lump Sums - where one partner receives a lump sum payment from the other party’s pension when they retire
- Pension Attachment Orders - where one party will get a regular income, a lump sum or both from the other party’s pension when they retire.
- Individual Agreements - where you make bespoke arrangements to suit your needs
Our clients include professionals, business owners, retirees, and those with international connections around the world, including in the USA, Europe, the Middle East and the Far East, and their spouses. We have expertise advising middle-income and high net worth individuals and their families, with complex and valuable assets, including pensions.
Whether you are unclear about your pension rights following divorce or know exactly what you want to achieve, our divorce financial experts can provide clear, sensible, and pragmatic guidance to help you get the divorce settlement that will work for you and your family.
To discuss pensions issues or other financial matters connected to divorce or separation with our experts, please contact your local team in Bath or Bristol:
Bath 01225 448955 Bristol 0117 9055 055
Why choose Sharp Family Law for divorce pension advice?
Sharp Family Law is a niche firm of family solicitors in Bath and Bristol. Specialising in the field of family law and divorce court litigation, we are known for our constructive, strategic, and intelligent approach to family law.
Our goal is to find the most secure, long-term outcome for clients who are dealing with the breakdown of their marriage or other family law matters. We help clients to protect what matters most, including their pensions, so they can move forward confidently with their lives.
As well as using our expertise, we work with a range of other professionals, including pension advisors and actuaries, forensic and tax accountants, financial planners and mortgage brokers to ensure that our approach meets the needs of your entire family.
Independent recognition for our expertise includes:
- Richard Sharp is personally ranked Band 1 in Chambers & Partners
- Chambers & Partners – Band 2 for Family/Matrimonial Law in Somerset
- The Legal 500 - Tier 3 for Family Law in the South West
Our team’s training and professional memberships include:
- Resolution– the professional network for family lawyers committed to taking a non-confrontational approach to family law
- Richard Sharp is a trained collaborative lawyer and family mediator in both the UK and USA. Tina Marshall-Kelliher and Victoria Barnett are trained collaborative lawyers
To find out more about our family lawyers’ individual expertise, please take a look at our team.
Choose the right approach for you and your family to achieve a fair settlement for your retirement
With a strong focus on finding resolution, we can help you work out how your pension funds and/or income could be shared in a way that works for your situation and need. Then guide you through private negotiations and draft a Pension Sharing Order that achieve fairness between the parties.
A professional Family Mediator could facilitate your discussion on any pension issue that existed in an even-handed way. The mediator could also make suggestions as to how the issue might be resolved, how others have done so, and what the process would be if the issue were ever contested in court. By also reality testing with you a solution proposed, the mediator could help you reach a pension share that would work for you both
Meeting together with their trained collaborative lawyers, couples can problem solve and negotiate a financial arrangement including a pension split based on what is important and a priority to them and their family.
Applying to a Family Court for a Financial Order
Where a voluntary settlement cannot be agreed, or an amicable approach is not appropriate, we can apply to a Family Court for a Financial Order with a Pension Sharing Annex that would decide how the pension funds and other financial assets held would be split between you on divorce.
Common questions about divorce and pensions
The total value of any pension fund held is part of the financial separation to be resolved. This covers all pensions and pension contributions either party has made, not just those accrued during the period of the marriage.
The overall aim in divorce financial settlements is to achieve fairness between the couple. This applies to pensions as much as to other assets and income. It will often be fair to provide the divorcing couple with similar incomes in retirement. However, an equal split may not be the fair result depending on financial needs, contributions, health, ages, the length of the marriage, or, in non-needs cases, the non-matrimonial nature of the asset ie if the pension fund was acquired prior to the marriage.
A pension fund can be split by:
- A percentage of the pension fund being placed into a separate pension scheme for the benefit of the receiving party
- A percentage of the pension income being paid regularly to the receiving party
- A lump sum from the pension being paid to the receiving party at the point when the pension is taken
- Some combination of the above
It is also possible for one spouse to receive a greater share of other assets (such as the marital home) in exchange for surrendering their pension rights.
For the purposes of making a divorce financial settlement, pensions are valued based on their ‘Cash Equivalent Transfer Value’ (CETV). This is the amount the pension holder would be able to move into a different pension scheme.
The CETV might be less than the ‘fund value’ because it will account for any charges associated with transferring the pension fund to another scheme.
You can ask your pension provider for a CETV statement free of charge once a year.
If you are concerned about the impact of your divorce on your pension, it is important to get specialist advice as soon as possible. There are various options for achieving a fair financial settlement that protects your pension.
It is common for couples to agree a bespoke financial settlement that means one party takes a greater share of other assets, rather than taking a share of the other party’s pension. Other options may also be available, depending on your circumstances.
Speak to our divorce pension specialists in Bristol and Bath
For pragmatic, constructive and sensible advice on your pension rights during divorce or separation, please contact your local team in Bath or Bristol.
Bath 01225 448955 Bristol 0117 9055 055
“Your guidance and steadfastness when things were getting difficult will always be appreciated. Your calm, knowledgeable and meticulous approach kept the good ship afloat when it was in danger of floundering. Many thanks.”
Download a pdf – Client Preliminary Information Form
- The Money Advice Service
- The divorce and separation calculator, is a tool that can help you to make sense of your financial situation.
- Child Maintenance Service (CMS): The Child Maintenance Service or Child Support Agency (CSA) calculates and collects child maintenance. The website contains a maintenance calculator and information leaflets
- The Land Registry:Provides details of property ownership, which are helpful to attach to your Form E
- The State Pension:Information on the state pension, with forms to print off
- A life expectancy calculatorwhich helps to calculate your life expectancy for maintenance as well as pensions