Pensions on Divorce – your options

If pensions are an issue in your divorce then there are three ways to deal with them: –

• Pension Attachment Orders

This option results in the court ordering that a pension company pays out a percentage of the lump sum/income to the other spouse. This takes effect when the pension holder starts to draw the benefits. The drawback of this option is that if the pension holder dies before drawing the benefit then the whole pension is lost. It is for this reason that this is not a popular option for divorcing couples.

• Pension Sharing Orders

This option results in a percentage of a pension scheme being transferred to the other spouse.  This provides each party with their own pension pot and independence over when this is accessed.  If this is a preferable option for you then you need to be sure that the pension scheme has been properly valued to guarantee that you are receiving the correct percentage.  Certain schemes, generally public sector and final salary ones often do not take account of all of the pension benefits.  It is often advisable to seek help from a specialist pensions actuary.

• Offsetting

This can sometimes be an attractive option for a spouse whose priority is to secure a higher capital settlement in lieu of pension sharing or pension attachment orders.  The value of a claim against a pension is offset against other capital assets meaning that a spouse can immediately benefit from those funds, rather than waiting to reach the appropriate age to draw down the pension.  As with the pension sharing order, it is imperative that the value of the pension is correct.

Contact our specialist team of Family Law experts here at Chadwick Lawrence for more information: http://www.chadwicklawrence.co.uk/personal-services/family-law/