Pensions on divorce: what are the optionsFor many divorcing couples the pension may be the second biggest asset after the matrimonial home. The Pensions Act 1995 first introduced the requirement to take pensions into account on divorce under English Law. This requirement had been in place in Scotland since The Family Law (Scotland) Act 1985.

A pension is valued using the Cash Equivalent Transfer Value (CETV), representing benefits accrued to date. This includes benefits accrued prior to the marriage. Therefore for anyone marrying later in their working life, this could be a significant sum.  As part of the discussions on the finances on divorce it is therefore critical that advice is sought on what to do regarding the pension rights.

Pension sharing rules apply to civil partners as well as to married couples.  Consequently, all references below to spouse/ex spouse will also include civil partners/ex civil partners.

What are the options?

There are 3 options available for dealing with the pension on divorce:

Over the next 3 days each option will be discussed in more detail highlighting the advantages and disadvantages of each.

If you are going through a divorce and would like to discuss your options relating to a pension please do contact me on 01932 698150 or email [email protected].

My guide Pensions and Divorce can be downloaded here.

photo credit: Flickr/DrJohnBullas