Let’s face it, pensions are not the most exciting topic at the best of times. However, they are really important and that is amplified in circumstances where a divorce is happening. Quite often, the division of labour and assumed roles within a marriage will mean that one person will have a far more valuable pension provision than the other – which is fine if the marriage endures, and the pension benefits are available to the couple. But if there is to be a divorce, that will not automatically be the case.
Statistics show that pensions are often overlooked in divorce financial settlements, especially those negotiated without the benefit of specialist legal and financial advice. Pensions are an asset of the marriage, just like the family home or other capital investments. They can actually also frequently be the most valuable asset. Take, for example, a good public sector pension like the Teachers’ Pension Scheme, which can often provide a pension of £40,000 + per annum from the age of 60. Based on future life expectancy of, for example 85, the total income that would be generated from the pension is £1 million which does serve to put the issue in proper perspective.
As a general rule, all pension assets acquired during the marriage by the couple will form part of the ‘pot’ to be shared between the couple. There is specific legislation which covers pension rights on divorce. This enables the Court to make a pension sharing order, which in very simplistic terms is ‘pension splitting’ so that part of the pension is taken out and put into a pension in the other person’s name. They will then have their own individual pension which will not be impacted by their spouse or former spouse predeceasing them.
It is vital, if a fair and appropriate settlement is to be achieved, that pensions are considered carefully in every case. Berwins’ Family Law Team includes lawyers who have particular expertise in this area and will be able to protect your interests properly. Please contact us for an initial chat about your circumstances if these are issues which are relevant to you.
William Kaye is a Family Solicitor at Berwins. If you require legal advice on any of the above, give William a call on 0330 016 8621.