It can sometimes be tricky to deal with pension issues when divorce occurs. Often, we see clients who have not realised the importance of their pension or known how to deal with it.
Deciding on pension arrangements can seem intimidating or complicated. It can also be difficult to find the motivation to deal with pensions when other matters can seem to hold a more immediate sway over your future and living situation. However, considering your retirement fund is an important step in fairly dividing your assets and can give you a sense of security about your future in the long-term.
Luckily, our expert divorce lawyers in Bristol are here to help in supporting you through the process. A divorce is already an uncertain and difficult time for many people, so we aim to make this process as effective and stress free as possible for our clients.
1. Identifying when to think about pensions
It’s never a good idea to just ignore pensions, even if they don’t feel relevant to your current circumstances. They can often be some of the biggest and most under-valued assets arising from a marriage and it’s always worth talking to your lawyer about pension sharing and offsetting. In the most extreme cases, failure to disclose a pension as a part of your finances can mean the court could set aside a final order and re-open the case. It can even lead to a party being found to be in contempt of court as “full and frank” disclosure of finances is essential for reaching a fair outcome.
You might assume that you have no claim on your former partner’s pension or that they have no claim on yours, but this is often not true. Particularly in cases where one party was contributing to the family unit in a capacity that made it more difficult to earn a pension, like caring for children, it is possible that the pension could be shared or attached.
Without the correct information about your pension, making decisions about – for instance – what will happen to previously shared property can leave you at an enormous disadvantage in the long-term. While a state pension is designed to meet the basic needs of retired people, an additional retirement fund will offer you better comfort, security, and opportunities in your later years. We want you to feel confident that you understand all your options and can make informed decisions about your case.
2. Considering the pension provision in detail
It’s particularly important to think about different types of pensions – for example: public sector pensions, defined benefit pensions and defined contribution schemes – as these will all be treated differently when evaluating the shared assets of your former union. Pensions may also have varying benefits which may affect the amount of income they provide and the options available to the wage-earning party. It is normal for people to gather multiple different private pensions as they move between different jobs, which will all need to be considered, even if some have not been updated for years or the paperwork has been lost.
If there’s an age difference between you and your ex, you might also need to think about the time difference between each of you being able to access your pensions. This is especially true if one partner is nearing their retirement age, as they may be able to make use of their pension freedoms by withdrawing the money before an order can be made. We will look at your pensions in the context of all the other facts of your case, and in light of all the other matrimonial assets. We can talk you through the issues and help work out the best approach for your situation.
3. Getting to grips with pension issues at an early stage
There are various steps to take when dealing with pensions. We might need to get up to date pension values, instruct a Pensions on Divorce Expert (PODE) and implement a pension sharing order, just to name a few. There are also some cases where the cash equivalent variations don’t truly reflect the value of a pension, which can result in an unfair agreement without expert help.
It’s important to make a start on these steps early on, because no one wants their divorce to be delayed unnecessarily. It’s also important to realise that pensions can change in value over time, making them something of a ‘moving target’. This means early advice is really valuable.
4. Knowing how to get the right information
We will help you to decide whether you need advice from a PODE to consider what a fair outcome might look like, and find the right expert for your case. We find that asking a PODE the right questions is crucial to getting the full benefit of their time and expertise. Gathering all the necessary information from pension providers can be time consuming, but knowing which are the vital questions can speed the process up and cause less delay to your divorce.
In the event that you and your former partner are using a Single Joint Expert, there are a lot of rules about how this should be done to ensure that the expert remains impartial. Our solicitors are all experienced at liaising with PODEs and are well placed to guide you through this process. We are experienced in writing letters of instruction which ensure the essential questions are covered by the report, which will set you up for the best possible outcome.
5. Helping you achieve the right outcome
Our divorce solicitors in Bristol will help you plan for the future and think about how to best meet your needs. There are no one-size-fits-all answers or solutions in family law – every divorce is different.
In most cases, it will be possible to reach a financial agreement between parties, so that we just need to obtain the court’s approval before it can be put into action. We will also support you in the event that contested court proceedings are required to come to the best possible agreement, considering the value of the assets and income accumulated by both parties.
Our aim is always to look at the individual facts of your case, understand your goals and priorities and to give you timely, cost effective advice so you can be confident about your future.
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