The importance of pensions in divorce

Pensions are often overlooked when couples are separating. The parties often favour physical assets
such as property or cash, it is simpler to understand and can be used now.

Despite the substantial size of pension wealth within marital assets, 71% of divorcing couples overlook
the importance of pensions in divorce.

The University of Manchester found that often, well over two thirds of pension wealth is owned by one
party to the marriage, usually the man.

A pension can be one of the most valuable assets of the marriage. Distribution of that pension can
readdress some of the imbalance in earning capacities of the parties, the disparity in parties’ resources
can be rebalanced in retirement.

Pension sharing

Pension should be fully and accurately disclosed as part of full financial disclosure. This should happen at
the start of the proceedings and before negotiations take place.

The disclosure process is crucial to fully understand the full picture of partes’ resources and highlight any
disparities in meeting the parties’ needs.

There are two main options for sharing pension wealth within the divorce. The first is pension sharing. A
Pensions Sharing Order is when one party is given a percentage of the other party’s pension(s) to invest
in a pension in their own name.

The other is Pension Offsetting. Pension Offsetting is when one party is given a larger share of one of the
other assets to offset their interest in the other party’s pension. This could be cash or property.

Legal Advice on Pensions.

It is crucial to get the best legal and financial advice. To determine the true value of the pensions
available for division and to address any disparities in wealth when looking for a settlement.

At Rucklidge Law we have family law solicitors that specialise in complex financial division in divorce. We
can direct you to the right professional should a financial advisor be needed to assess the current
situation and assist with the future.

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