When should I seek the advice of a Pensions on Divorce Expert?
When facing the end of a marriage or civil partnership it is really important not to overlook pensions. Pensions are one of the most complex areas encountered during divorce negotiations and after the main residence the most significant family asset is quite often built up in pension arrangements.
The diagram above shows the journey that clients generally go through when divorce proceedings commence, through to division of assets and settlement.
Types of pension arrangements
- Defined Contribution or Money Purchase pensions – these are pensions which have a capital value linked to the value of the underlying investments.
- Defined Benefit or Final Salary Pensions – These pensions provide a guaranteed level of income payable from the scheme’s designated normal retirement age, or earlier if prepared to accept an early retirement penalty.
When divorcing, it is far easier to achieve a clean division of assets when dealing with defined contribution or money purchase pensions, given that these pensions consist of a pot of money with known capital value. A Pension Sharing Order (PSO), on the types of arrangements, enables those looking for a ‘clean break’ from their spouse or civil partner as any pensions split are transferred into individuals arrangements in the names of each party. Access to these benefits can generally take place any time age 55 has been reached (age 57 from 6th April 2028).
Where there are defined benefit or final salary pensions involved, depending on the rules of the pension scheme and the options they are willing to provide the position can be slightly more complicated.
Henson Crisp's Pensions on Divorce Expert
At Henson Crisp we know that divorce is one of the most stressful times people go through. Adding pensions into the mix can be daunting, so the Pensions on Divorce Expert (PODE) at Henson Crisp is here to provide advice and guidance. They will work closely with the divorce lawyer, valuing and reviewing both parties’ Defined Contribution and /or Money Purchase pension arrangement and prepare the report required for a pension sharing order to be issued by the family court.
Separately, regulated advice and a personal recommendation can also be offered by Henson Crisp once the PSO has been issued and the financial settlement agreed, to ensure the funds are invested in accordance with your current and ongoing requirements.
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