Pension rights on divorce: the latest research from Royal London

The latest research from Royal London states that women who divorce end up with less than half the property and assets of married couples. On the pension front, women end up with less than one third of the average pension pot.

Royal London and top London divorce solicitors are encouraging divorcees to consider pension rights on divorce and to take expert financial and legal advice. If they do, divorcees should understand the true value of the family pension pot and their pension rights and legal options.

Currently, Royal London say that some women are ending up as ‘pensions poor relations’ as they do not know their pension rights. That is something that the best London divorce solicitors want to change.

If you are getting divorced, you need to know the extent of the family wealth and the true value of any pensions. Without this information, you cannot reach a fair financial settlement. You also need to know your pension rights and financial settlement options in order to be able to make informed choices.

How can OTS divorce solicitors help?

If you are facing a separation or divorce  or are in the midst of family mediation sessions to help you reach a financial settlement you  need expert legal advice to help you understand your financial settlement options and, in particular, your legal options in relation to pension funds.

For advice and help on pensions in divorce and financial settlements and for information on the law on pension sharing orders please call me on 0203 959 9123 to discuss how OTS Solicitors can help you.

The Royal London research on pensions and divorce  

The Royal London research looked at data from the government’s Wealth and Assets Survey (WAS.). This survey considered the pensions and property of divorced women compared to with married couples.

The key issues that came out of the Royal London research were:

• For women  aged over fifty the average married couple has three times the pension pot fund value of the average divorced woman; and
• Women aged over fifty and divorced do not have more valuable houses to compensate them for the reduced value of their pension pot.

Top London immigration solicitors say that statistically one in three women aged 55 to 70 will experience marital breakdown or divorce. Therefore, the research information from Royal London is of importance to many women.

Pension rights and divorce 

The best London divorce solicitors find that both spouses often do not fully understand their pension options and rights on divorce.

Many spouses do not believe that a pension can be shared, as it is owned in one spouse’s name. Others think that if they share a pension their spouse will continue to get the benefit of their ongoing pension contributions into the pension fund. Others think that if a pension is in payment or drawdown that you cannot share it.

Top London divorce solicitors find that all these common misconceptions result in pension funds either being ignored in divorce proceedings or the value of the pension fund not being adequately established before a financial settlement is reached.

Pension rights and pension reports

There is often a reluctance, on the part of a husband and wife in divorce proceedings, to commission a pension report from an actuary or pension or financial expert.

The best London divorce solicitors find that spouses do not see the relevance of a report when a pension administrator has written to them to provide the cash equivalent transfer value of the pension fund. The relevance of the pension report only becomes apparent once an expert has assessed whether the pension transfer value accurately reflects the true value of the pension fund.

A pension can be a couple’s most valuable asset, sometimes even more valuable than the equity in the family home. That is why it is so important that spouses get expert help and know their pension rights and options prior to reaching a financial settlement.

When you are getting divorced, it can feel overwhelming. You may be helping your children through the separation process or moving to a new house or just too stressed to be interested in what might happen in your distant retirement. That is why you need an expert London divorce solicitor and a pension actuary or expert on your side to consider your pension rights and financial settlement options.

Pension valuations

When you ask for information about your pension or your spouse’s pension, you will be given a document with the cash equivalent transfer value of the pension fund.

The paperwork and figures may appear comprehensive but relying on the cash equivalent value of a pension fund can be very disadvantageous to you.

If you have a company pension with a transfer value of £500,000, you would think that your pension pot is more valuable than your spouse’s final salary pension with a transfer value of £400,000. You would therefore assume that a fair financial settlement would involve you transferring £50,000 of your pension pot to your spouse by means of a pension sharing order.

Without expert legal advice from top London divorce solicitors and a pension report, you may lose a lot of money. A company pension scheme might be underfunded. A final salary scheme may be very generous, to the extent that the transfer value bears no relation to the amount of income that will be received on retirement. That means if a pension report is not obtained a pension sharing order may be made in favour of the spouse who has the lower pension transfer figure but the pension that, in real terms, will pay out far more.

This type of scenario is not as rare as you might think. That is why it is vital that you chose a London divorce solicitor to advise you on your pension rights. The solicitor can then get help from a pension advisor or actuary.

How can OTS divorce solicitors help?

If you are facing a separation or divorce  or are attending family mediation sessions  you may need expert legal advice to help you understand your financial settlement options and, in particular, your legal options in relation to pension funds.

Pensions are complex investments so it pays to take expert advice from a top London divorce solicitor to make sure that the value of any pension fund is properly taken into account in the divorce financial settlement.

For advice and help on pensions in divorce and financial settlements and for information on the law on pension sharing orders please call me on 0203 959 9123 to discuss how I can help you.