Pension Sharing

inspirespirit

I have lived apart from my husband for 12 years. I am 66 and receive the State Pension. He is 63.
He has recently discovered a pension pot that he forget we had taken out years ago when our children were little. I was working part time and bringing up the kiddies and he was working full time so we put it in his name as that was just the way things were done back then but it was paid for out of our joint account.
He has said he is happy to split it with me as it was obviously meant for us both when we reached retirement. It's around 20k.
I don't know what the legalities of that would be.
It is a draw down pension.
Would we be better off sorting out a divorce and using that as a settlement or is he allowed to just give me half?

Brynsam

He can certainly give you half the cash once he's withdrawn it from the pension pot. Any income tax on the withdrawals would be down to him. You are still legally married so there is no limit to the amount he can gift to you if he so wishes.

inspirespirit

Thank you Brynsam. That is really good to know.

Albermarle

Normally he should be able to take 25% of it tax free and then the other 75% would be taxable .
Although exactly how much tax he will pay will depend on if he is currently earning and how much he earns .
Also depending on his tax situation it might be beneficial to take your half out this tax year and his half the next year.