Divorcing couples may be unaware that pensions are marital assets that can be shared. Often, they prioritise splitting property and savings and making arrangements for children without considering pensions. Women can be disadvantaged by this approach because pay inequality and time off to raise children impacts their ability to save for retirement, which may then be compounded by a failure to take pensions into account on divorce.
Before a financial settlement is agreed, a divorcing couple should provide full financial disclosure to each other so that a fair settlement can be reached. This includes the disclosure of all financial assets including property valuations, savings, investments, bank balances, personal assets, income and importantly, pension valuations. It is unlikely for couples to agree a settlement between themselves and they may have no idea of the value of each other’s pensions.
Pensions are varied and complex and this may be one of the reasons they are so often overlooked or ignored. You should seek advice from a ‘Pension on Divorce Expert’ (PODE) to ensure that all pension options have been considered before a settlement is finalised.
Pension sharing is currently optional and can only be dealt with by way of a financial Court Order which can only be obtained as part of divorce proceedings.
Parties often cite legal costs as a reason for undertaking a ‘DIY’ divorce and/or financial settlement. This can be a very hazardous approach as it may be impossible to rectify an inadequate settlement agreed without appropriate legal advice.
For further advice please contact our experienced family team by calling 01733 346 333