There is no set framework for dealing with pensions in divorce, but a pension is considered part of your marital assets, whether it belongs to you or your spouse/civil partner, and it must be considered in divorce proceedings
The court will look at provision for the family and assess what resources are available to all parties to ensure their future financially. If the court rules that the pension is to be shared, there are two ways this can be achieved:
- The capital is divided at the time of the divorce.
- The pension is divided to make equal income for retirement.
Courts vary in the approach they take, but the following orders can be used:
- Pension Sharing Order – the court divides the pension between spouses setting up a new pension scheme with the credit either within the occupation scheme or into a personal plan.
- Lump Sum Order – one spouse is ordered to pay a capital sum to the other which could be used to set up a plan for their retirement
- Pension Attachment Order – used less frequently, on reaching pensionable age an income is paid direct to the spouse. This is also the same of lump sums on retirement.
- Transfer of property – share portfolios, endowment, property or investments can be transferred to your spouse and capital can be released at a later date to produce an income.
Take Financial Advice
Pensions are notoriously complicated, especially when you’re getting divorced. Solicitors are not qualified to give financial advice and therefore it is essential to seek advice from an Independent Financial Advisor.