Pension Sharing Orders in divorce
Results from a recent survey by The Office for National Statistics identify that the number of couples divorcing has risen for the first time in 7 years.
Ironically, the Brexit divorce negotiations are being blamed!
The survey also revealed that the most common duration of a marriage is 12 years. Courts consider a marriage of this length to be a medium to long marriage.
This can affect the decision a Court will reach about how the parties’ financial assets should be divided. A much shorter marriage may well lead to a different outcome.
Age when divorcing
The survey also tells us that men were, on average, aged 46 when divorcing and women, 43. This is significantly older than previously when the average age was in the mid-30s.
Importantly, by their mid-40s both parties may well have a significant pension pot.
Aside from the family home, a pension is often the most valuable asset in a marriage, particularly if the individual has an armed forces, teaching or NHS pension, to name just a few.
Pension Sharing Orders
The Court has the power to make what are called Pension Sharing Orders, effectively transferring part of one party’s pension into a pension for the other. The percentage can be anything up to 100% of the pension benefit.
On divorce, the party without pension benefits lose such rights as they may have had to a widow or widowers pension benefit. Pension Sharing Orders are intended to compensate for this and to allow such pensions as there may be at the time of the divorce to be shared broadly equally.
This is particularly important to a spouse who has either not worked or worked part-time during the marriage and so have been unable to contribute to their own pension provision.
If a party has built up a considerable pension pot it may be necessary to obtain expert advice on how the benefits should be shared. A 50% share does not necessarily mean equality of income in retirement.
It follows, these are complex matters.
If you are in any doubt as to your position, please contact a member of our Family team to discuss.
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