Our IFA, Paul Clifford, gives advice on pension sharing on divorce…

There are no hard and fast rules governing how assets should be divided when a couple divorces, although there is a broad starting point of 50:50.

However, new research6 shows that women often end up with less than half the property wealth of married couples and less than one third of the average pension wealth.

The study showed that the average divorced woman over 50 has pension wealth of £131,000 compared with £454,000 for the average married couple.

Dividing pension assets

Many people think that on divorce a pension solely belongs to the party who is named on the policy, but that’s not the case.

A pension has to be considered along with other financial assets owned by the couple when reaching a financial settlement. Pension assets can be apportioned in various ways:

  • offsetting the value of one spouse’s fund by transferring a lump sum, or other assets, to the other
  • splitting the pension fund into two separate pensions
  • arranging that when a pension comes to be paid, a portion goes to the other spouse.

Getting the right advice at the right time

It’s important to get advice when considering pension sharing on divorce and how marital assets should be divided. A pension pot can often represent a substantial sum of money and needs to be considered alongside other major assets such as property.

Post-divorce, it makes sense to discuss your revised circumstances with us. You’ll need to reconsider your financial goals, and review your mortgage, pension and investment plans, plus remake your will. Reorganising your finances can represent a major step in moving forward.

6Royal London, 2019

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

For more information on pension sharing on divorce, please talk to us. Clifford Osborne are Independent Financial Advisors (IFA) based in Eastbourne, East Sussex, offering retirement planning advice, pension advice, mortgage advice and more. Our clients often come from Uckfield, Lewes, Brighton, Tunbridge Wells, Hastings, Bexhill, Newhaven, Seaford, Crowborough and further afield.

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The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

It is important to take professional advice before making any decision relating to your personal finances. Information within this blog is based on our current understanding of taxation and can be subject to change in future.

It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.

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The purpose of the blog is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.