Pensions and Divorces – A Survival Guide

Boring, boring pensions!

What is the biggest asset to consider in most divorce cases? You are right – the family home. At least in the majority of matters, that is the case. What’s the next biggest? The car? The savings? Nope, in most cases, the next biggest asset is the pension of one or both parties.

People often, and quite understandably, begin to glaze over when there is in-depth discussion about pensions…..” defined benefit, defined contribution, hybrid, Sipps, cash equivalent transfer values”……snore. However, for divorce lawyers, they cannot be ignored, and the same must therefore apply to divorcing couples.

“Will my ex get their hands on my pension?- is a question that every divorce lawyer gets asked week in, week out. And the answer is “quite possibly”. At the very least the courts, and therefore us lawyers, will always consider a pension as a potential asset for division on divorce – and sometimes it is the main asset, worth far more than the family home.

So, even if you do think that pensions are less than riveting, if you are getting divorced you will soon appreciate that you need to get a little more interested and understand what happens to pensions in divorce settlements.

How are pensions split in a divorce?

But, and here is the kicker, pensions are also a pretty complex area. And dividing them in a fair way is not straightforward…do you look at the whole period of contribution, or just while you were together, what about paying out a lump sum instead and keeping your pension pot untouched? These are all matters that require very careful consideration, and, ideally, expert advice to help you understand all of your pension divorce options.

Back in February 2019 lawyers, and other professionals, were provided with a significant bit of guidance from the publication of the Pension Advisory Group’s (PAG) tome “A Guide to the Treatment of Pensions on Divorce”. I won’t pretend that it is a page-turner…but it was and remains vital reading for all family law practitioners. However, this detailed guide is not aimed at Joe public…..which brings me to the point of this blog, which is that Advice Now (an independent, not-for-profit website, run by the charity Law for Life: the Foundation for Public Legal Education) have just published this…..

https://www.advicenow.org.uk/guides/survival-guide-pensions-divorce

It is a pension and divorce survival guide, and it is aimed at members of the public. It does a great job of giving clear and straightforward advice on an area which can be anything but….so hats off to them. Therefore can I suggest that if you are getting divorced, and are not able to afford expert advice on the whole pension issue, you read this first. You might need a strong coffee but it could save you a lot of money and, compared with the 176 page PAG report, it’s an absolute thriller!

If you are looking for expert pension and divorce advice, our divorce & family lawyers are ready to support you every step of the way, helping you mitigate any problems that arise through a relationship breakdown. Get in touch here.