What happens to my pension upon divorce?
For many married couples a pension scheme will be one of the
largest family assets. The terms of the scheme, however, will
not be written in user friendly language. The Inland Revenue
Regulations dictating when you can reitre and how you can take
your pension benefits are complex. Until 2000, the situation
was even more confusing for people getting divorced, with complicated
legislation making clean-break divorces being hard to achieve.
Long-awaited changes in the law have now taken place and from
December 1st 2000 a person is entitled to claim a share of their
spouse's pension.
1. What is the benefit of the pension sharing legislation?
A. The court is able to take off part of the value of your
spouse's pension (a pension debit) and give it to you (a pension
credit).
2. Will I have to keep my pension credit in the same scheme?
A. That will depend on the nature of the scheme and if you
are able to and want to transfer your pension credit to a
new scheme you must take advice from an authorised independent
financial adviser.
3. When will I be able to draw benefits from my pension credit?
A. That will depend on the type of scheme and its rules;
usually not before the age of 50 at the earliest.
4. What other important points should I consider when trying
to get a pension credit order?
A. If you are a wife and younger than your husband a fixed
sum of money will buy you a smaller pension annuity than him
because actuarial tables assume women live longer than men.
5. What is the real benefit of this legislation?
A. In many cases it will make it easier for the court to
achieve a clean break settlement, either immediately or at
a fixed future date, because the pension will give you an
income in your own right so you will no longer need maintenance
from your spouse.
For further details of Charles Russell's other services for
families such as adoption, pre-nuptial arrangements, rights
of co-habitants, please contact David
Davidson or another member of the Family Group.
Click here to see details
about David Davidsons book 'Pensions and Marriage Breakdown'
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