Daily Express - Divorce and separation and what it means for pensions

When you separate be aware that the court can order pension sharing and will usually want a pension sharing report if the pensions are more than minimal. You can argue that the pension income of each party should be equal or that the capital of the pensions is shared. You can argue for all of the pensions to be shared or just those accrued during the marriage.
The best planning that you can do is to recognise that you should each make provision for your pension and that if the other party is not putting money into a pension they can later still argue for a share of yours. Have an honest conversation.
The court has the power to transfer or sell capital assets and can order one party to pay the other ongoing income provision. Consider a pre-nuptial agreement to protect your wealth.

A Pension is something you pay into for your work, but, it is a matrimonial asset and can be split in a financial settlement. This can happen after separation and even after divorce if a financial settlement is not settled legally. Pensions are an important asset because they are a future income or future capital.

If a couple wishes to protect or preserve any assets, including pensions, they can agree to sign a Pre-Nuptial Agreement. These types of agreements set out what each party will be entitled to, or not entitled to upon any separation or divorce.

When there is a separation looming, it is important to assess what each party will need to be able to survive financially until a settlement can be reached. This may include one party seeking Child maintenance to pay for household costs if the other party moves out.

We are increasingly seeing issues with clients who have tried DIY divorces. The financial aspect of a divorce is a road paved with pitfalls for the unwary.
Beware of:
Finalising a divorce until pension sharing is complete. If the person with the pension dies the recipient may not receive the benefits, especially with DB pensions.
Pension holder drawing down pension during divorce to reduce the amount available to share, including tax-free lump sums.
What else is being given up in benefits - for example, life insurance.
Focusing on assets needed today at the expense of retirement income.
Loans from family and friends, especially where there is no written agreement.

Pre-nups can be very beneficial, they allow couples to agree a sensible split before the passions of a failed relationship.

In long marriages, the starting position is that all assets are shared equally, including pensions. More recently there has been a change in the courts views about mid length marriages and it is harder to ring fence pre marital assets, including pensions

Anyone contemplating marriage should consider pre nuptial agreements, in an attempt to protect pre marital assets, but legal advice is key and in advance of the wedding day.

You're unlikely to start a marriage planning for what happens if it ends, which means divorce is an extremely daunting and uncertain time. Therefore, it’s important to start discussions from a position of knowledge. Having a good understanding of your expenditure, assets and what you’d want your future lifestyle to look like is a good starting point for negotiations. There are many different processes available when divorcing and so seeking professional advice can help guide you to the most suitable option. If you aren’t married or in a civil partnership, there’s surprisingly very little legal protection in place if you separate. As such, there are a number of precautions that people in this situation should consider from the outset i.e., a cohabitation agreement.