Pension sharing on divorce
We are often reminded about the importance of reviewing our pension arrangements. Pensions are also an important consideration if you are going through a divorce or dissolution of a civil partnership. They are often one of the most valuable assets in the proceedings, but their complexity is such that, until pension sharing was introduced in 2000, they were sometimes overlooked when couples came to divide their assets.
What is pension sharing?
Pension sharing is one of the ways a pension can be divided between couples and means pension assets can be included and form part of a financial settlement. If a Pension Sharing Order is made or agreed, one spouse can receive a percentage of the other spouse’s pension, which can then be placed into a pension in their own name. It has the effect of severing the financial ties the couple has, so far as pensions are concerned, which can lead to a full clean break being effected between them both.
An alternative to pension sharing is offsetting. If an individual wishes to keep hold of their pension, or does not require a pension, they can agree to provide the other with more of another asset in its place, for example, equity in a property. The assets are still divided but in a way that better suits the couple.
This is a complex area and it is essential that you seek not only legal advice, but also independent financial advice, when going through a divorce or dissolution of a civil partnership. Birkett Long has specialists in both areas who often work together to help our clients secure the most appropriate outcome.
There are several options available to separating and divorcing couples. If you would like to find out more please contact Yolande Millar on 01245 453878 or email@example.com.