Divorce and Pensions

For many separating couples, the Divorce, Dissolution and Separation Act 2020 has simplified the divorce process. From 6 April 2022, there is no longer any need for one partner to ‘point the finger’ at the other; this is the new ‘no fault’ divorce.

The simplicity of the online application has the potential to lull separating partners into a false sense of security. In the absence of the animosities or hostilities often associated with divorce under the old law, it is all too easy to forget that the financial arrangements following your marriage breakdown require to be considered.

Where you have agreed a financial settlement with your spouse, it is important to ensure that the agreement reached is fair and that all assets of the marriage have been taken into account. One of the main assets in a marriage – and one which is quite often overlooked – is pensions.

The decision whether or not to share a pension is an important one. Many separating couples feel that their spouse’s pension is ‘off limits’ because they themselves have not made any financial contribution to it. However, a decision not to seek a share of your partner’s pension could leave you in a difficult financial position at the time of your own retirement.

Pension can be considered in 3 ways:

• Pension attachment order (‘earmarking’)
• Pension sharing order
• Offsetting

There are many different types of pension scheme and so it not advisable to adopt a ‘one size fits all’ approach. Before making any decisions about pension sharing, it is often appropriate to seek expert advice. You and your partner are able to ask a Pensions on Divorce Expert (PODE) to prepare a report to assist you.

The family team at Thomas Flavell & Sons can help you to understand the importance of pensions following your marriage breakdown.

With offices in Hinckley, Stoney Stanton and Leamington Spa.

For our Leicestershire team call 01455 610747, for our Warwickshire team call 01926 887700.