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When relationships end

Divorce, dissolution and separation

If you get divorced or dissolve a civil partnership, your pension assets should be taken into account in the settlement.

While pensions don’t need to be shared, they should not be ignored when deciding how assets should be allocated; pensions are often a couple’s most significant asset, after a house, and can easily be overlooked. 

You and your ex-spouse or partner will each need to tell the Court the value of your pensions. However, you don’t have the automatic right to know the value of your ex-spouse’s or partner’s pension, and vice versa, but you can each decide to tell each other or go through your solicitor to get an understanding of any assets affected. You can find out about the value of your pension by asking your scheme administrator(s) and/ or pension provider(s).

However, you should be aware that can be costs for providing this information and starting any subsequent court orders; these costs must be met by either one, or both, of the parties involved. The scheme administrator and/or pension provider must tell you about any costs at the beginning of the process.

  • If you live in England, Wales or Northern Ireland, your pension is valued at the date of divorce or dissolution of the civil partnership.
  • If you live in Scotland, however, only the increase in the value of your pension over the course of the marriage or civil partnership  is included. This means that pensions should be valued at the date of separation.

If you’re embarking on the divorce process or are ending a civil partnership and would like to talk through your pension options you can find out more here.

What are the options available?

There are several options that couples can take, when thinking about splitting their pension assets during a divorce or dissolution. These include:

Different options may be more appropriate than others depending upon the complexity of your situation and  the age of the parties involved; however you choose to proceed, it’s very important that regulated financial and legal advice is taken throughout the process.

If you’re embarking on the divorce process or are ending a civil partnership and would like to talk through your pension options you can find out more here.

 

The Divorce and dissolution process

How you come to an agreement and what that pension agreement looks like, can depend on where you live in the UK.

You can find out how the process of a divorce or dissolution of civil partnership here

 

What if we are just separating?

If as a couple you decide to delay or not  go through the formal divorce or dissolution proceedings, your pension arrangements remain unchanged. 

You might however look to make changes to things like your nomination of wishes forms (i.e. who you ask the pension provider to provide any pension benefits to in the event of your death) and if you move out, your change of address details. 

You might also want to think about how the separation affects other things as changes of circumstances need to be taken into account when looking at or receiving benefits 

 

How are State Pensions affected?

Some elements of your State Pension entitlement are also taken into account on divorce or dissolution of a civil partnership.

The implications will differ depending on whether you reach State Pension age before or after 5th April 2016. (i.e. you are eligible for the old or new State Pension)

Reach State pension age on or before 5th April 2016

Current Previous rules, which apply up to 5 April 2016, do not allow the basic State Pension to be split shared on divorce or dissolution of a civil partnership, but you may be able to claim a basic State Pension that is based on your ex-spouse’s or partner’s National Insurance Contribution history. This does not affect the amount of basic State Pension that your ex-spouse or partner receives. However, if you remarry or enter a civil partnership before you reach State Pension age, you lose this right.

Any additional State Pension benefits such as SERPS or the Second State Pension (S2P) can be split shared on divorce or dissolution of a civil partnership through a pension sharing order. If a pension sharing order is granted, your additional State Pension may increase or decrease, depending on the Court’s decision.

Reach State pension age on or after 6th April 2016 (even if you defer taking your State Pension)

If you divorce, or dissolve a civil partnership, on or after 6 April 2016, it may be possible to be granted a pension sharing order over part of an ex-spouse’s or partner’s ‘Protected Payment’. This is any additional State Pension benefits built up before 6 April 2016. The main element of the new State Pension is not allowed to be shared.

 

Frequently asked...

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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