Last week the consumer magazine Which? reported the result of a survey its members carried out, that found that only 15% of divorcing couples include pensions in their financial settlement, and that 58% of the people they surveyed said pensions weren’t even discussed within their divorce proceedings.
The findings have been met with some surprise within the family law community. Certainly, family lawyers should always advise their clients of the importance of including pensions in divorce settlements. Pensions are one of the most valuable assets in many divorces, and anyone entering into a settlement that doesn’t take them into account could be missing out very significantly.
Whether or not the findings indicate the true picture nationwide, they do seem to show that more needs to be done to ensure that those going through a divorce are aware of the importance of pensions, and of their possible entitlement in relation to them.
In particular they should ensure that before they enter into any divorce settlement they first require their spouse to make full disclosure of the value of all of their financial assets, including pensions.
Pensions are usually valued by reference to their ‘cash equivalent transfer value’, being the amount that could be transferred from the pension into another pension fund. To give an idea of the possible value of pensions, it is not at all unusual for a pension to have a transfer value running into several hundred thousand pounds.
Pensions can be dealt with on divorce in one of three ways: by an ‘offsetting’ arrangement, whereby the party holding the pension keeps it, but the other party receives more of the other assets to compensate them; by a pension attachment order, which states that one party will receive part of the other party’s pension, when the other party receives it; or, most commonly, by a pension sharing order, which transfers all or part of one party’s pension into a pension belonging to the other party.
It is absolutely essential that you take proper expert legal and financial advice upon which of these arrangements is best for you, and how exactly to implement it. We can find you an expert lawyer that works with you on our digital platform, and can also find you a financial expert to advise you. For more information, call us on 020 3904 0506, or click here, and fill in the form.
* * *
Family Law Café offers a modern, agile and compassionate approach to family law, giving you a helping hand when you need it and guiding you through the complexities of this difficult and stressful area. Family Law Cafe is your start-point for getting matters sorted with strategy, support and security.
Image: Public Domain, via Piqsels