‘Outcomes can vary!’ Britons warned about safety of pension savings in divorce
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Divorce can be a major life event, and cause significant upheaval, but many people may not think about their pension as a key asset. Speaking to Express.co.uk, the PPF warned pension arrangements can form a major part of a divorce settlement.
As such, taking action as soon as possible, and even as a contingency plan could be useful.
Pensions are considered alongside any other asset when it comes to divorce proceedings.
They will be considered as part of the overall financial settlement two people make.
Some will be worried about whether their partner can lay claim to their fund.
The PPF explained: “As this is a complex situation, most people will seek legal advice.
“This is because the outcomes for each party can vary enormously.
“Your local representative will help you agree the best way to divide the assets fairly.”
In certain instances, a judge will have the power to make an order to share out pension savings between the couple.
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This is known as a pension sharing order.
Pensions can only be shared if the court order on divorce has been made by the judge.
In England and Wales, the total value of the pensions each person has built up is taken into account.
This includes all of a person’s pensions, except the state pension.
In Scotland, rules slightly differ as only the value of the pensions a couple has built up during the marriage or civil partnership is taken into account.
The PPF has highlighted the Court may instruct that a person’s pension is split with their ex-partner.
This is a slightly different arrangement known as a Compensation Sharing Order.
There is usually no formula as to how pensions and assets are divided, but general fairness is usually the aim if a person goes through the legal route.
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The PPF concluded by urging people to seek legal advice, particularly if their circumstances are complicated.
Britons may also wish to know what happens to their state pension if they divorce.
Royal London states: “From April 6, 2016 onwards, neither the old basic state pension nor the new state pension can be shared.
“But if you get divorced and the court issues a ‘pension sharing order’ you or your ex-partner may have to share any extra state pension entitlement you’ve built up, such as an additional state pension or any protected payment.”
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