{"id":4817,"date":"2014-12-18T15:56:07","date_gmt":"2014-12-18T15:56:07","guid":{"rendered":"http:\/\/cliffordosborne.agentgorringe.uk\/?page_id=27"},"modified":"2023-03-30T14:26:42","modified_gmt":"2023-03-30T13:26:42","slug":"pensions-divorce","status":"publish","type":"page","link":"https:\/\/cliffordosborne.co.uk\/pensions-divorce\/","title":{"rendered":"Pension in Divorce"},"content":{"rendered":"

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Divorce & Pensions<\/h1><\/h1><\/div>
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Divorce and separation can create financial difficulties and pensions in a divorce situation can be complicated. Clifford Osborne\u2019s East Sussex based financial advisors provide divorce pensions advice.<\/p>\n

Our offices are in Eastbourne, East Sussex and we enjoy meeting clients across the Hastings, Uckfield, Seaford, Crowborough, Newhaven, Lewes, Bexhill, Tunbridge Wells, Brighton and Hove. As a result of recommendations from current clients we offer\u00a0divorce pensions advice well beyond the East Sussex borders too.\u00a0To arrange a free initial discussion at your home, workplace or our offices contact us today.<\/p>\n

In a divorce the pensions of both parties may be considered when the court decides what money goes where. If one spouse has never worked, while the other built up a large pension fund, this will have to be taken into account. The divorce pensions calculations can be complex.<\/p>\n

Company pension schemes are usually valued at their ‘transfer value’ – the amount of money which would be transferred if the holder moved it to another company scheme. Private personal pensions are taken at their fund value. But valuing a pension fund is one thing – working out how to distribute it is quite another.<\/p>\n

There are a number of factors to consider when handling the division of pension rights in a divorce.<\/p>\n

As of April 2009, restrictions imposed on people who receive part of their ex-partner’s pension benefits were scrapped. As the rules stood, part of the pension benefits received by the non-pension member could not be taken before age 60 and in addition could not be taken as a tax free lump sum. But in contrast, the pension-member could take benefits from age 50, with 25% of it as a tax-free lump sum.<\/p>\n

With one in three marriages ending in divorce and more than four million divorcees in the UK, the move has had significant implications. When a couple gets divorced, pension benefits should always be taken into account in any settlement, but how this value is shared between the two parties can be handled in three different ways.<\/p>\n

Pension Offsetting<\/h2>\n

This is still a very popular method of sorting out the marital assets on divorce. The basic principle of pension offsetting is very easy to understand which probably goes some way to explaining its popularity.<\/p>\n

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  1. The pensions are given cash values<\/li>\n
  2. These values are then taken into account when assessing the assets<\/li>\n
  3. Each party keeps their own pension benefits<\/li>\n
  4. Other assets are balanced against them to come up with an agreed split<\/li>\n<\/ol>\n

    It’s easy, simple and cheap. It creates a clean break – but may not be the most equitable way to split the whole range of assets, especially if one party is pension-poor.<\/p>\n

    Pension Attachment \/ Earmarking<\/h2>\n

    An earmarking order requires part of the members\u2019 retirement benefits and\/or lump sum death benefits to be paid to the ex-spouse \/partner. Pension earmarking is rarely used.<\/p>\n

    It is available in relation to any divorce or dissolution petitions served in England and Wales from 1st July 1996 where the earmarked payments started after 5th April 1997.<\/p>\n

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    1. It will earmark a percentage of the benefit<\/li>\n
    2. Dependents\u2019 benefits nor state pensions can be earmarked<\/li>\n
    3. Pension benefits continue to belong to the member<\/li>\n<\/ol>\n

      It’s worth noting that benefits under most kinds of pension schemes can be earmarked but no State Pension Benefits can be made subject to an earmarking order and dependents\u2019 pensions can’t be earmarked for someone else.<\/p>\n

      The issue with earmarked benefits is they continue to belong to the member and the member can normally control when any pension payments start. Pension payments will be taxed at the member\u2019s highest rate of income tax rate.<\/p>\n

      Pension payments to the ex-spouse or civil partner will stop on the member’s death and the full pension will revert to the member on the death of the ex-spouse or civil partner.<\/p>\n

      Pension payments will cease if the ex-spouse or civil partner remarries<\/p>\n

      Pension Sharing<\/h2>\n

      A pension sharing order must do three things.<\/p>\n

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      1. State the pension rights held by one party are to be shared for the benefit of the other<\/li>\n
      2. The percentage of the rights to be shared<\/li>\n
      3. Identify the pension arrangements which are affected (from Dec 2000)<\/li>\n<\/ol>\n

        The Process<\/strong><\/p>\n