Pension Sharing

My husband's pension fund in approx £300k and mine is £35k. He is 65 and I am 55. He thinks as I still can work for 10 years, he shouldn't have to share any pension. Please tell me he is wrong!!!!

How long were you married?

Not divorced yet, seperated but would have been 20 years.

The length of marriage is cohabitation before marriage + marriage to the point of separation.

After 20 years the starting point is half each, age is a factor but you will have a claim on the pension how much depends on factors i have listed in your other post.

Hi,

In my experience, it is normal for the pension assets to be in the pot after a long marriage such as yours. Therefore, I believe your husband to be wrong!

As Dukey points out 50:50 is the usual starting point for negotiations to begin and you could split the pension pot based on a simple equality of capital basis.

However, equality of capital misses out important factors such as age, health and sex. Women outlive men and so need more pension asset to provide the same amount of pension income as a man. In your case, there is also a large disparity in ages which needs consideration. Plus, are there any health issues which might reduce either of your life expectancies?

An equality of income calculation would capture all these factors. I can point you in the right direction of a decent actuary who can provide these calculations.

The valuation basis is only the start of quite a unnecessarily complicated process when looking at how to divide pensions on divorce.

To move things forward you will need to get some sort of agreement from your husband on the valuation method. I accept this might not be easy given his current non believer status so perhaps approach this via your solicitor?

Please post any further questions you have here and I comment further. Alternatively, if you would prefer not to do this in the open forum, please PM me.

Regards

Phil

The Divorce IFA

Although I am a Resolution Accredited Independent Financial Adviser my comments are given here as general guidance based on the (often limited) information available and does not constitute financial advice. They should not be seen as a substitute for detailed financial and legal advice.

Thanks for your reply. Happy to do this in open forum, just in case it helps anyone else. I just think I need some re-assurance. As a result of form E my husband's solicitor send six and a half pages of questions!! Including asking for copy of my CV. At that point I could not afford for my solicitor to reply to such nonsense, so I am now self representing. We have had the first hearing and the judge's direction is for an Actuarial report on pensions. But my husband still does not get it. His solicitor says our case is unique because of the age difference. Basically we have 300k equity in house, his pension 300k and mine 35k. We have a 16 year child who lives with me. My husband wants to settle out of court and has offered me 235k. Of course I declined and he thinks I am totally unreasonable and wants nothing more to do with me!!!!! (like I care) I am curious to the advise he is getting, we are very early stages in proceedings, and his solicitor bill is £6000 more than mine. ANY ADVICE ANYONE HAS WOULD BE VERY MUCH APPRECIATED. To help anyone else, I will advise outcome, as and when happens.

xyz

A pension share would only work IF both of you can be adequately housed from the available equity.

It is not likely that you would have a greater share of the equity AND pretty much 50% share of the available pension pot.

The offer you have represents some 78% of the available equity. he would retain 90% of the pension pot. How valuable the pension is will depend on what kind it is ...

But it is comparing apples and pears. You need something to live in - and something to live on - both now and in retirement.

The options are: offset pension against equity. You get less/no pension share in return for all or most of the equity in the house. Eventually you sell and use the money to fund retirement.

Split equity and share pension - exact proportion to be determined and would depend on your housig need - which at present is for a 2 bed place and will be for the foreseeable future especially if your 16 year old continues on to Higher Education. Remember pension shares are done on CETV and how well they work out for you depends very much on how the sharing happens - whether it can be in the same scheme or if you have to transfer money out. The "true" value - especially if it is a Final Salary scheme - may be very much greater than the CETV (2x in my case). That will be reflected in the amount of pension the scheme pays but not the CETV - which is where having to transfer cash out gets trikcy as you get a lot less in real terms do theoretically would need a greater "share" to equalise income.

However the fact that he is on the point of retirement does make a difference.

In our case (12 year age difference, ex on point of retirement) the judge took his lump sum (25% tax free from the pension pot) and added it to the assets pot to be divided. The residue was counted as income and he retained all of it (barring the very small amount of CM he eventually had to pay). There are lots of ways to look at how that worked in percentage terms.
It was roughly 80% of house to me, 80% of pension to him (going by CETV alone). However in real terms it meant I got roughly 60% of the main cash assets. He got 40%. I kept my pension while he got his - which, because it is a final salary, index linked one, actually pays out 3x what mine will.

But at the end of the day I needed to stay in the house because of the children ... and they were my priority.

I think what you need to know is what the pension benefits are: What is the lump sum that he is due? What is the residual annual pension? This may help you find a different way to divide up the assets that works for you both.

Hadenoughnow