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What are we each entitled to in our divorce settlement?

What does the law say about how to split the house, how to share pensions and other assets, and how much maintenance is payable.

What steps can we take to reach a fair agreement?

The four basic steps to reaching an agreement on divorce finances are: disclosure, getting advice, negotiating and implementing a Consent Order.

What is a Consent Order and why do we need one?

A Consent Order is a legally binding document that finalises a divorcing couple's agreement on property, pensions and other assets.


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Pension Trnasfer

  • sapphire
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15 Jan 08 #10705 by sapphire
Topic started by sapphire
Can anyone give me their experiences of pension. split and access to it?

21 years married and access to pension.
WHat is the potential court ruling/spilt %

Am i able to transfer this and access these funds now or will it have to go into a protected pension fund that i cannot get to until retirement??

help please

  • loobyloo
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15 Jan 08 #10710 by loobyloo
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Good post i also would like to know that info cos money more use now whilst kids dependent onme than in 23 years time
looby

  • maggie
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15 Jan 08 #10718 by maggie
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Under current law you can't take a pension share pension into payment under age 60
Earmarked pension income depends on the age at which the member takes the pension into payment.
To get pension value before that you would have to swap your share of the value of the pension for some other asset - ie you get more of the house for agreeing not to split a pension in his name .

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15 Jan 08 #10730 by Ladybelle
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Is it true that if it is a very big pension it could outweigh a house value ? I have a 75K mortgage with 75K equity in the house approx. He has a civil service pension which someone on a financial website valued VERY approximately at over £300,000 taking into account his lump sum ?? and length of service and age etc ? so - how do you calculate his into a settlement ?
Could I keep the house and still have part of his pension ? or will he insist on taking some house share ?
I want to keep the house but I cant afford the mortgage. He is paying the mortgage now and I was hoping he would be made to pay it until end of term but that is over 22 years still !!
I've been married 25 years and he is the main earner, I cant work full time due to disability. All of the criteria I have read also should mean they would take into account the standard of living before the split ?
I'm in such a mess worrying about all this as I am utterly convinced I will lose the house and have no money or no pension for the future :(

  • Peter@BDM
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17 Jan 08 #10904 by Peter@BDM
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Sapphire

I am not clear who currently “owns” the pension, which may make some difference. I’ll assume that you “own” it. The redistribution options are offsetting, sharing or attachment. 50/50 split is often the starting point and some would base this on the income the pension produces rather than the current value.

It is possible to access pensions below the age of 60, but generally, it works out as a very poor deal. Many pension schemes allow early retirement but with a reduced pension, this reduction is often around 5% for each year the pension is taken early. Ill-health early retirement is another option for some, if you fulfil the criteria set by the scheme.

You may be able to transfer the pension to another arrangement and draw the pension but this is not to be done lightly. If you still work for the employer and are therefore an active member of the scheme this is almost certainly a bad idea.

If it is a deferred pension – one from previous employment – you have a legal right to transfer it out to another arrangement. This requires authorised financial advice and the advisor would need to do some calculations to establish whether this is a financially viable option – many potential transfers fail this test.

Finally, in certain circumstances you can draw a personal pension from age fifty. The rules have changed and this age limit is gradually being raised, so whether and when you could retire under a personal pension (probably the least consideration bearing in mind the above) will depend on how old you are now.

If your ex owns the pension you could let her keep it with you keeping another asset of similar value - offsetting. As Maggie rightly says, make sure that you get an appropriate valuation of the pension if you go this way. If you don’t offset you could opt for a pension sharing order, although these are quite expensive to do. Effectively, you would get a share of the pension value, which would create an entirely separate pension for you. This “new” pension will be either in the same scheme or into another arrangement – such as a personal pension. It depends on how the scheme implements pension-sharing orders what would happen. For example, most of the unfunded public sector pension schemes will only create a pension in their scheme – you don’t have the option to go into a personal pension.

Peter.

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17 Jan 08 #10909 by Peter@BDM
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Annie
The pension is often the second largest asset and in some cases, its value may even outweigh that of the house. For several reasons public sector pensions are particularly valuable, so a civil service pension is going to be worth a considerable amount. Putting a value on the pension is relatively straight forward, using an appropriate valuation is slightly more complicated but not insurmountable.

At some stage, you and your ex (?) will make a financial disclosure. If one of you has applied for Ancillary Relief this will be on form E. One of the Form E requirements is that values are placed on all the assets (and liabilities). In the case of the pension, this will be something called a Cash Equivalent Transfer Value (CETV) which the scheme is obliged to quote and it is usually free. For several reasons CETVs, particularly for public sector schemes, usually undervalue the pension (possibly by 20% to 30%, or possibly more if the pension is for one of the uniformed services).

One of the options (see earlier postings) is to offset the pension against other assets, which could include the house. You should definitely obtain an appropriate independent actuarial valuation of the pension if you are likely to take this option.

If you want to get an idea of what the pension is likely to be worth before the CETV is obtained you can use the free calculator on our firm’s website. It really is free, there are no catches. Go to www.bradshawdixonmoore.com/ and click on the grey button for the Career Guide Calculator.

I hope that this helps.

Peter.

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