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:- 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.
- 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.
- 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.
