Pension Divorce Advice London and Essex

UK Pension and Divorce

Filing for divorce can be stressful. There are numerous financial obligations — and in many cases, most couples are too overwhelmed with the emotional toll to even think about their pension. However, the pension can form a huge part of the assets and it´s important to consider it within the terms of any financial negotiations following a divorce.

At FOL Wealth Pension Divorce Advice London, we guide you through this difficult time to understand the intricacies of your pension.


What Happens to My Pension During a Divorce?

If you’re separated, you may be able to start claiming benefits from your former partner. But you'll need to start the divorce process before you're eligible for pension benefits. Usually, when you get divorced, you'll have to declare all of your assets, including your pension, so that they can be valued and divided between both parties.

Once your pensions have been assessed, the total value of both parties' combined pensions will be considered before they're divided. This includes any amounts saved before and during your marriage.


What Is the Value of My Pension?

In the UK, the Cash Equivalent Value (CEV) method is used to value a pension during a divorce. The Pension Sharing (Valuation) Regulations 2000 stipulates the considerations to be used to determine the lump sum value of your pension rights on the day of valuation.

We use the CEV to ensure a fair division of your pension assets. Some of the factors we take into account include the following:


The Funding Status of Defined Benefit Schemes

With Defined Benefit Schemes, we check whether the scheme is fully or over-funded. We also check if the scheme actuary has taken into account any extra money added to pensions when calculating the CEV. Understanding this funding status provides insights into the stability and sustainability of pension benefits.

Early Retirement Benefits

We assess whether the pension scheme offers generous early retirement terms, particularly for ill-health early retirement or redundancy. Public sector schemes often provide such benefits, which can significantly impact the CEV. Our advisers evaluate these early retirement provisions to determine the potential value and flexibility of pension benefits.

Accelerated Accrual Rates

Certain pension schemes, such as the Armed Forces, Police, and some public sector schemes, may offer accelerated accrual rates after a specified number of years of service. We also check whether the CEV reflects standard or accelerated accrual, as this can influence the projected benefits at retirement.

Guaranteed Benefits in Personal Pension Arrangements

FOL Wealth Divorce Pension Advice Essex enquire about any guaranteed benefits within personal pension arrangements, such as guaranteed annuity rates or minimum fund values at retirement. These guarantees can impact the overall value and security of pension assets as they are significant in the valuation process.

What Are My Options?

FOL Wealth Pension Divorce Advice London considers your CEV, there are several options for dividing your pension assets. They include:

Pension Offsetting — This option uses the value of your pension to offset other assets like property. For example, you could keep your pension while your former partner is awarded a larger share of another asset, like a shared home.

Pension Attachment Order — This alternative pays some of your pension to your former partner, usually when you start to withdraw it. For example, if you decide to start taking your pension at 55, your partner has to wait until you initiate the pension withdrawals before they can get their share.

Get in Touch With Us Today

At FOL Wealth Divorce Pension Advice Essex, we aim to make divorces a bit easier. Our advisers will help you understand how much your pension is worth and the rules about dividing assets so you can get what you deserve.

Contact us today for a free initial consultation to discuss your needs in the strictest confidence.

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Abi Ladele
Abi LadeleMSc, APFS, CertPFS (DM)
Abi Ladele
Abi LadeleMSc, APFS, CertPFS (DM)
Abi started at HSBC in 2006, offering a compelling insight on a range of topics, including asset allocation, investment strategies, market dynamics and wealth management.

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