02 February 2016
A Short Guide to Pensions on Divorce
Here at Slater and Gordon, we are often asked about pensions on divorce because spouses can claim against each other’s pensions. Understandably, people are usually keen to protect their pensions as the nest eggs they have been building for their future.
If you are going through a divorce then you’re entitled to know how much your partner’s pension is worth. You can find this out by calling your pension administrators and requesting your cash equivalent transfer value.
Equivalent transfer value is the total value of your pension at the date you make the request and the value that your pension would be if you were able to transfer it to a new pension scheme. If your pension is in payment you would need to obtain a cash equivalent benefit statement instead.
Once the value of your pension is known we will then be in a position to consider what your spouse’s claim is likely to be and how this claim can be settled. If your spouse has a pension, this will also need to be valued and taken into account when considering your spouse’s claim against your pension.
Divorce law sets out what the court has to consider when deciding how a couple’s finances should be divided. In addition to this, there are key principles in case law such as a person’s needs (which can include housing needs and incomes), sharing and compensation.
Only once the needs of both people have been met will the court consider contributions based arguments.
For example, if you began your pensionable employment in 1995, began cohabitating with your partner in 2005 and then married in 2006, should the pension you accrued between 1995 and 2005 be excluded? Unfortunately, there is no simple answer to this question.
Generally speaking, pensions are more likely to be a significant issue if the marriage is long and if there are children from the marriage. Pensions will be less important if the marriage is short, the couple are relatively young and there are no children.
If we can show that your ex’s needs have been met and they have no genuine need for pension accrued outside of the relationship then we are more likely to be successful in protecting years of a pension accrued outside of the relationship.
However, we cannot offer any guarantees with this approach and if the people involved are older and your spouse has little or no pension provision of their own then these arguments are less likely to be successful. The best advice we can give is to deal with your matrimonial finances, including your pension, when you separate.
Hannah Cornish is a family lawyer at Slater and Gordon in Milton Keynes.
If you require any advice on your finances please do not hesitate to contact our specialist family law team for a fixed fee, no obligation initial appointment on freephone 0800 916 9055 or contact us online.