Pensions & Divorce

By: Chester Financial Wealth Management Ltd  08/05/2013
Keywords: financial, wealth management, Financial advisers

Pensions can be dealt with by sharing, offsetting or earmarking. Sharing Pension sharing is available for divorce or annulment proceedings filed on or after 1 December 2000. It can also be used on the dissolution of a civil partnership since 5 December 2005. A pension sharing order has the effect of splitting the member’s pension pot by a specified percentage. The member’s pot is then reduced by that percentage and the ex-spouse/civil partner is awarded a pension credit which can be transferred into his/her own pension arrangement. We will guide you through this process and help you to find a suitable home for any funds to be transferred. Offsetting Offsetting simply means that one partner's pension is traded against other assets from the marriage to give each other a fair value. This can still be used, but problems can occur when the pension is the largest single asset and there aren't any other sufficient assets to trade off against it. Earmarking Earmarking has been an option for splitting up pension rights. It means that a proportion of the pension is specified 'earmarked' to go to the wife, usually upon retirement. This does not allow for a clean break and the control of the pension remains with the member. The member of the scheme could delay retirement or act in a detrimental way and, of course, the pension would end if the member dies unless there was provision for the ex-spouse. This could result in severe financial hardship, particularly if the receiving spouse has not had time to build up a personal pension. Another disadvantage is that pension benefits are treated as income for the member even though part is paid to the ex-spouse. Earmarking is still used today but more often in cases where the pension is already being paid.

Keywords: financial, Financial advisers, financial advisors, Financial Planning & Investments, Independent Financial Advisers, Independent Financial Advisor, Inheritance Tax Planning, investment advice, investment advisor, investment management, retirement planning, wealth management

Contact Chester Financial Wealth Management Ltd


Print this page

Other products and services from Chester Financial Wealth Management Ltd


Wealth Protection

Whether planning in case of a serious illness or death, or being prepared for changes in the stock market, Chester Financial Wealth Management can provide a thorough assessment of your risks and can help to guide you to safety.


Long Term Care advice

If you are seeking up-to-date and impartial care fees advice on behalf of a loved one, you may be able to save them money, claim benefits they were not entitled to and obtain peace of mind that the quality of long-term care you want for them can continue indefinitely.


Inheritance Tax Planning

With careful strategic planning, Inheritance Tax (IHT) advice can reduce or even eliminate an IHT liability and can ensure that your estate is dealt with in the most effective way, according to your wishes and without delay.


Retirement Planning

It is now possible to spend a third of your lifetime in retirement. Good financial planning will not only help you to enjoy your retirement, but it could also enable you to leave a legacy for future generations.


Investment Planning

Whether you are an individual, a small business owner or trustee seeking independent financial advice, our expertise and guidance will help you build, manage and protect your wealth, creating peace of mind during the process.