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Posted on: 12 Jan, 18

Divorce and pensions are very significant. A pension could be a couple’s most valuable matrimonial asset, in some cases worth more than the equity in the family home. As such, it is important that pensions are considered in the financial settlement if a couple decides to divorce or dissolve their registered civil partnership. All the money you’ve saved into it (except for your basic State Pension) will be taken into account when your assets are divided.

Importance of Taking Pensions into Account

Pensions vary in complexity. Some are relatively straightforward whilst others, in particular public sector or other final salary schemes, can be much more complicated. When a marriage breaks down, a couple might not appreciate the importance of taking pensions into account as a key asset – and perhaps even the most valuable asset – on divorce. It may be that you’re a long way from retirement, and how you’re going to manage then may not seem the most pressing issue. However, it’s important not to underestimate or overlook pensions and consider how this could eventually impact on your retirement.

The courts have long had the power to take pensions into account in dividing up the matrimonial assets. Over the years, you may have paid into a number of workplace and personal pension schemes, as well as the additional State Pension. You’ll need to obtain a valuation for each one. This will be based on what your pension would be worth if you moved it elsewhere. Typically, the total will be below the current fund value because any charges or penalties for transferring out of the scheme will be included.

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