How are pensions divided on divorce?
Pensions can often be a major asset within a marriage, possibly as valuable as the equity in your home.
There are different types of pensions that can be divided. They can be work related or personal. The basic state pension cannot be divided but it is possible to share the additional state pension.
The most common way of dividing a pension is by way of a pension sharing order whereby a spouse receives a specific percentage of any one or more of their ex-spouse’s pensions. This is known as a pension credit and is either transferred into a pension they may already have thereby “topping it up” or, If the receiving spouse does not have a pension of their own they will need to set one up and will need professional advice to do so. This is known as an external transfer. Sometimes an external transfer is not available under the rules of the pension scheme and the spouse has to receive the pension credit by way of an internal transfer whereby they join their ex-partner’s scheme.
Pensions can also be offset. This involves the spouse with the larger pension keeping it intact in return for which the other spouse receives a larger share of the other matrimonial assets (usually the family home) by way of compensation.
Pensions are rather unique assets and it can be quite daunting having to consider them. What exactly can be divided also depends on where you live in the UK and whether you are divorcing or dissolving your civil partnership. A solicitor will be able to give you expert advice as to how to get the best for you and your family.
If this concerns you or you have any other queries concerning family law, Please call Allen Bailey our Family and Matrimonial law specialist for a free initial chat to see if he can help you. (01748 832431)