How Does Divorce Affect My Pension?
This blog will outline how divorce can affect your pension.
When going through a divorce or dissolution, what will happen to your pension might not be the first thing that comes to mind. However, it is our most important asset for many of us. Therefore, it is crucial to understand how it will be shared between you and your ex-partner.
If you are looking to end an adult relationship and need help to ensure peace of mind and the best possible outcome for you, speak to one of our Kee Solicitors today on 0141 611 1191.
What Happens to a Pension Following Divorce?
If you are married or in a civil partnership and seek divorce or dissolution, then you may be required to share some of your pension with your ex-partner. However, this depends on a few factors, including what has been agreed between you or Court Orders.
What Happens to a Pension Following Separation?
If you separate from your partner without a legal divorce or dissolution, then there is no formal route towards sharing any pension either of you holds. However, you may still be entitled to a sum following the death of the pension holder.
How Much of a Pension Will be Shared?
If you are married or in a civil partnership, the Court will take any pensions held by either party into account when making financial orders. The Court will use the ‘cash equivalent transfer value’, which is the total amount of money you would be given if you transferred your pension to another provider. They will then calculate what percentage should be transferred to the other party.
In Scotland, Courts will do their calculations according to the value of the pension built up during the marriage only. Generally, any value amassed before the marriage or civil partnership or after the separation date is not factored in.
What is a Pension Sharing Order?
If a Court is required to distribute a pension, they will give a Pension Sharing Order. This outlines you and your former partner’s right to any pensions held by either party.
However, a Pension Sharing Order is always part of a wider financial agreement considering the financial situation of you and your ex-partner and other marital property, such as the family home.
For more information on how pension sharing will fit into a broader financial arrangement following divorce, click here to read our blog.
Can Cohabiting Couples Seek a Pension Sharing Order?
Pension Sharing Orders are only relevant for couples that are formally separating from a marriage or civil partnership. Although cohabiting ‘as man and wife’ can offer certain rights following separation, the Court cannot issue an order to split any pension entitlements.
Get in Touch
With all the emotional distress that can come with divorce, the effect it will have on your pension might not be at the forefront of your mind. Moreover, the specifics on how it is distributed are very complex and, for the uninitiated, difficult to predict.
At Kee Solicitors, our experienced solicitors will help you to work out how you can expect your pension to be distributed during divorce and help to ensure you receive the best possible result.