pension

I have been married to a police officer for 18 years. We have split up and he has moved out of the house. He is trying to get me to agree on a financial settlement for the property and policies that we have. I mentioned about the pensions but he says that as we have no children and i have always worked that i am not entitled to his pension. He earns around 35k gross a year and I earn 16k we both pay into a pension. Am i likely to benefit from going after his pension or would it be better and quicker to settle finances on a 50/50 basis as he is suggesting.

In law you are entitled to a share of his pension -it might be a half share -might be more, might be less - depends on what's a fair outcome for both.
His pension might be the most valuable marital asset - get it properly valued and claim your rightful share.

Yewtree

I just want to endorse what Maggie posted. You do have entitlement concerning the pension and it is likely to be worth a considerable amount of money, you would be very unwise to ignore it.

The starting point is that he should be asked to obtain a valuation – called a cash equivalent transfer value (CETV) – from the scheme. This is likely to take some time for the scheme to produce. CETVs on the police pension schemes always undervalue the pension, often by very significant amounts. So you should not consider offsetting (allowing him to keep his pension in return for a greater interest in another asset) wit Hough getting a more appropriate valuation done by an actuary.

You may wish to consider other options such as pension sharing.


By the way, make sure that the policies are properly valued as well; this should not cost much if anything, to do.

Peter.

Hi Peter
Can I ask you if CETVs on the NHS pension schemes undervalue the pension as what they do with the police pension. Do you thing I need more appropriate valuation done by an actuary and to ask for pension sharing rather than offseting an NHS pension.

Many thanks
zozo

Hi Zozo

Yes, CETVs definitely do undervalue NHS pensions. An actuarial valuation will usually be worthwhile and cost effective (our on-line service works well on the NHS scheme and is cost effective at £25 + VAT). Pension sharing can be a good option but it really depends on your objectives and the value of the pension. If your main aim is to keep a roof over your head then offsetting the pension is a very good option and this is when you need an appropriate valuation by an actuary. If the CETV is substantial (say more than £50k), the cost of having the lawyer draw up the pension sharing order is justifiable. It all depends on your objectives, the costs that will be incurred and your ability to meet them.

Pension sharing in public sector schemes always results in a credit within the scheme (usually preferable), for other schemes there are many pitfalls and it is unwise to proceed without a detailed actuarial report.

If the aim of any pension sharing is to equalise the pension incomes you will definitely need a detailed report.

Peter.

Hi Peter

I'm a bit confused at how the value of a pension is worked out. My xtb has a private pension. In the last statement recieved it says it has a value of £56,000 This sounds a lot of money to me but it also states that this will give him an annual income of approx £3000 (at todays values) This doesnt sound very much.

I think it would be better for me to ask for the pension to be included in the 'pot' now rather than wait and have a share of £3000 in 15 years time.

Do I just add £56,000 or is that being a bit naive?

Also I'm not sure about the SERPS part. I'm pretty sure he opted out. Does that mean there is an additional amount to add to the £56k?

Thanks

Lily

Hi lilyrose
I can only advise on the pensions aspect as I have been through this aspect. As part of the pensions report (however you obtain that, via Actuary or IFA) state pension forecast and SERPS information should be obtained to balance the report. You can apply to the DWP for your pension forecast or your might be able to obtain it online if your age/retiremnet date does not prevent under the new government legislation about pensions. You must then obtain a form called BR20 to apply for your SERPS valuation. Your Xtb? must also do the same. If you cannot find or obtain a BR20 form contact me via PM and I will send it to you via Email