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Divorce: How to Protect Your Pension

Separation is never easy, whether you’re divorcing your spouse or partner amicably or not, it’s a stressful time – especially when there are financial considerations to resolve such as pensions.

Usually, the former matrimonial home is the largest asset in a divorce settlement with pensions the next biggest asset. So, it’s important you take steps to protect your pension if you’re considering or facing a divorce.

3 Ways To Protect Your Pension

Depending on your personal circumstances and financial situation, there are 3 main options available to you for protecting your pension when you separate:

  1. Pension Offsetting
    This lets you keep your pension in its entirety by compensating your spouse or partner for the loss of a share in your pension by giving him or her a bigger share of other assets on offer as part of the divorce settlement. Whether this option is right for you will depend on the value of your pension as well as the other assets.
  2. Pension Sharing
    Part of your pension is taken and paid into a separate pension scheme in your spouse’s name, with pension sharing. Among the factors to consider with this protection choice is how many years you have remaining to pay into your pension scheme – as any and all future contributions would only go into your pension pot, it may be you can boost your pension fund again before you retire.
  3. Pension Attachment Order
    This enables a court to order that maintenance be paid to your spouse once the pension is in payment. At the point of payment, your spouse or partner will be paid directly by the scheme trustees. As with all the options, there is much to consider with this order, including the fact payment usually stops if your partner remarries and that you remain liable for income tax on the whole amount and any future contributions you make after your divorce goes through will increase the amount your partner gets at the point of payment.

Our family law solicitors have the experience, knowledge and understanding approach to help you decide on the right way to protect your pension if you’re filing for or facing a divorce. There are numerous factors to consider and each option will only work in certain circumstances, which is why your family lawyer will take the time to appreciate your individual situation, including your pension and assets to be considered in the divorce settlement, to ensure you find the best solution for you.

To speak to one of our professional family law solicitors about protecting your pension, contact us on 01244 311 633 or email advice@bartletts.co.uk