Pension Sharing Orders & Divorce
Britain has the highest divorce rate in the EU, but pension sharing orders are only 11% of all divorce settlements
The average across the EU is 1.8 divorces for every 1,000 people, but in Britain the rate is much higher at 2.8 divorces per 1,000. In Luxembourg perhaps couples are happier because the rate is just 0.6 per 1,000.
Breaking up is a distressing time for all involved so thinking about your pension might be the last thing on your mind? And this could explain why, in the last quarter of 2015, only 11% of divorce settlements approved by the UK Courts included a pension order. Despite the fact that only a court can make a pensions sharing order, or a pensions attachment order (called pensions earmarking in Scotland).
Many people just don’t realise what’s involved when a pension forms part of a divorce settlement, the pitfalls and the options open to them. For example, you can divide pensions in a number of different ways:
- pension sharing – you get a percentage share of any one (or more) of your ex-partner’s pensions;
- pension offsetting – the value of any pensions is offset against other assets;
- deferred pension sharing – this is used if your ex-partner’s pension is being shared. They have already retired and are receiving their pension, but you haven’t retired and are too young to be paid a pension;
- deferred lump sum – you get a lump sum payment from your partner’s pension when they retire; and
- pension attachment orders – you get some of your ex-partner’s pension when it starts being paid to them.
With all these alternatives to think about, specialist financial advice is a must. Contact ES Walton to help you with this difficult and complex issue.Contact Us