Divorce in Later Life: How to Divide Your Pensions
Often, the older you get, the more money you’ll have in your pension pot and when getting a divorce in later life this may be your biggest asset.
If you’re in a marriage or civil partnership, you’re automatically entitled to your former partner’s pension if you decide to divorce.
Pensions are treated like any other martial asset in divorce, and so there’s a possibility that any pension funds will be divided between you and your ex, just like your home and any joint savings.
If you’re worried about financial security and pensions in your divorce, get in touch with our Divorce Solicitors for initial legal advice.
Whether your divorce financial settlement goes to Court or not, you should make any agreements you and your ex come to about your pensions legally binding by applying for a Court Order.
There are three different options:
This is when an agreed percentage of your former partner’s pension will be transferred into a pension fund in your name. It’s a preferred option for both the Court and many separating couples as it gives you a clean break, while allowing you both to build up your funds separately.
A Pension Sharing Order gives you more independence and control over your pension and more flexibility for the future.
With a Pension Attachment Order, you’ll be paid the pension, either as a lump sum or income, when your former partner retires. The amount you get will depend on the value of your ex’s pension at the time of retirement.
One downside of this option is that it won’t give you as much security as a Pension Sharing Order, and you could be waiting a while for your ex to retire.
Pension Offsetting is when your former partner ‘offsets’ any imbalance in pension funds by giving you other assets in the marriage to make up the difference in income. This might be a share in your property or cash savings that equal the same value as the pension.
Meanwhile your ex will keep their pension fund independent.
But one thing to remember is that pensions aren’t liquid assets, so they’ll only become cash once your ex has retired. This could mean that the value of the pension is actually lower than the assets given during the initial pension assessment.
There’s no one size fits all when it comes to pension Court Orders, and the best option for you and your ex will depend on your circumstances.
If you’re unsure, we recommend getting expert legal advice from a Divorce Solicitor, who can advise you on your best course of action.
Pensions can get complicated in divorce, especially if one of you took time out of work to raise your children. We understand that financial security can be a worry when you’re going through a divorce or dissolution, particularly if you’ve got a smaller pension than your ex, or no pension at all.
It’s important that both you and your ex reach an agreement about pensions so you can relax safe in the knowledge that you’ll be taken care of in the future.
Our Divorce Solicitors know that pensions are often the most valuable assets in divorce, so we can help you secure a fair financial settlement.
Fill in the form below to get in touch with one of our dedicated team members, or call our team today on: 0808 239 3465