Pensions and divorce

Paulastorycatmad

Hello
I am getting divorced and we are trying to sort the pensions out, on a budget. My husband has a number of pensions from previous jobs that he never transfered to the next job. His pension pot is larger than mine. We are trying to do this without solicitors etc to keep costs down. We are thinking, if we add up his cetv's and deduct my total cetv's this will give us a value, then we can agree on a percentage to give to me. Can he just cash in his smaller ones and pay me into my bank, then I can transfer to my pension provider? Or will this have tax implications for us? Just trying to avoid the fees involved by the pension companies to transfer into my pension. Things are amicable and there's no worry about him not paying me. But is this allowed/legal? And what about tax issues for him and I?
Thank you
Paula

crv1963

He can't cash them in and hand you the cash into the bank unless he's over 55 and even then there are tax and future pension saving limits which will come into play.

Generally you need to look at all of the marital assets in the whole, the needs of children, the individuals divorcing and then maybe negotiate how these are divided up. Also the length of the marriage.

If you choose to share pensions then it is likely you don't need to share each pension pot but take from one pot- if it is big enough the portion you agree so only pay one fee.

justme111

Not sure using CETV would be the fairest way - if one intend to receive the pension rather than transfer it it may lead to unrealistic figures. So may be estimating his income/year and deducting your income/year and then organising pension sharing ? Of course if there are small pots which are going to be taken as a whole that does not apply

crv1963

justme111 wrote: »

Not sure using CETV would be the fairest way - if one intend to receive the pension rather than transfer it it may lead to unrealistic figures. So may be estimating his income/year and deducting your income/year and then organising pension sharing ? Of course if there are small pots which are going to be taken as a whole that does not apply

My ex and I were fortunate that we were in the same scheme so it was just a case of adding the CETVs together and dividing by 2, the funds were then transferred from my pension to hers at her cost.

But there are so many variables, house equity split can be varied against pension pots, or ISAs, savings, cars etc. Basically OP add all the assets up and then agree how to split them, pointless taking 2k from a pension if the transfer costs you 3k.

You might want to check but I think anything over 12 years is considered a long marriage so things get split 50:50, under 5 years a short marriage so each is returned to their pre-marriage financial position and inbetween is open to negotiation.

Silvertabby

Pension funds - DC or DB - can't just transfer X% from your husband's pension to your own pension account on his say-so. Otherwise, this would be a smashing tax avoidance ploy between couples who are not divorcing!

They only way they will do this will be on the instructions of a divorce court PSO (pension sharing order).

No way round this, I'm afraid.

Paulastorycatmad

Thank you everyone. All your points make perfect sense. We have been married 12 years. We separated and sold the marital home 3 years ago. Only just now sorting out divorce. No children involved and no other assets that we are worrying about. I'll look into what's involved with a pension sharing order.... Sounds expensive. We will be doing a consent order which will say we have agreed x on the pensions and we are leaving everything else, current individual properties, future assets etc alone. Just trying to do it the cheapest way possible. We will take from the biggest pension so we only have one fee. That's a good idea. Thank you.