Navigating Pensions in Divorce Proceedings

It can be a challenging prospect trying to deal with pensions in divorce proceedings. However, it is an asset that your spouse can make a claim over when considering how to divide the finances of the relationship. Separating Couples are  therefore advised to consider their respective pension provisions  alongside all other financial assets when negotiating a financial settlement.

A spouse can make a claim over  a private pension, namely those that you pay into directly, or a public sector pension, which those who work for a government body such as the council or the NHS will receive. However, a claim cannot be made over any state pension provision that one spouse may have accrued.

It is not uncommon that when you divorce, the pension pot can be one of the largest assets. It may be necessary to jointly instruct a pension actuary to address how a pension should be shared.

In financial proceedings, there are three ways in which pensions can be ordered to be shared:

• Pension Sharing – A percentage share of party A’s pension is transferred to party B.
• Pension Offsetting – The value of any pensions is offset against other assets e.g. party A provides party B with a lump sum in lieu of sharing a portion of party A’s pension.
• Pension Attachment – Party A agrees to pay a portion of their pension income to party B when it starts being paid to party A.

Solicitors are not pension experts. There is  guidance for when  pensions are to be shared, for example, where the - pension provision exceeds £100,000 or a public sector pension is involved, then a pension sharing report should be obtained from a pension actuary. This is an independent advisor who will calculate what share of pension is required to achieve equality be that equality of income or capital.

Pensions can be tricky to deal with. If you require any advice on how to deal with pensions  when navigating through a divorce, please get in touch with the Family Team today and we would be more than happy to discuss your matter further. Please call us at our office in Leicester on 0116 255 4855 or our office in Loughborough on 01509 610 312 and ask to speak to a member of the Family Team. Alternatively, you may prefer to email us at legal@johnsonastills.com or fill in our enquiry form.