Breaking up is hard to do…
Are you being prudent with your wealth?
15TH MAY 2018
The value of your pension not something that usually comes up over the dinner table or in front of the television. However, it might well be a conversation worth having – particularly if the worst should occur in your relationship.
What happens to your pension and assets should your marriage break down?
There are two main options via the courts: receive a percentage share of your spouse’s pension, or offset it in favour of other assets, such as keeping a house or car.
A third alternative is a pension attachment order, whereby one partner keeps the pension pot, and the benefits are divided when drawn, though this is generally not favoured by the courts, which prefer a clean financial break between the two parties.
Figures from the Ministry of Justice show that pension pots are second only to property in terms of high-value assets – and yet, less than one in five divorce settlements incorporate pension sharing or attachment orders.
Statistically, men will have up to three times more wealth in retirement, making the issue of pension settlements in divorce all the more pertinent to women.
Without this knowledge, ex-wives could miss out on a substantial amount of money – particularly if they choose to settle affairs away from the courts, as they will have no legal obligation to know what their soon to be former partner has in his pension pot.
“Divorces are sometimes painful, often emotionally traumatic, but it is nevertheless crucial that financial arrangements – not least the division of any pension funds – are taken firmly into account,” says Wealth of Advice’s Chris Breward.
“It is not just about your settlement in the here and now, but what it means going forward. A revision of your will may be in order, and if you should receive a lump sum from your former partner’s pension, astute planning will be required in order to make it last – and grow – until your retirement years.”
For futher information, get in touch today.
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