Post divorce pension help needed please

unsync

Hi, I have been awarded a lump sum and small pension pot as part of a divorce settlement. I have paid off debt and will invest remaining lump sum. I don't know what to do with the pension. I'm under 55 and don't work (ill health), but I do get Carer's Allowance. The pot is circa £40k. What is the best thing to do with it please.

mark55man

I'm not an expert on the divorce side of things, I'm sure someone will be along soon to confirm, but I believe its treated like a balance in an uncrystallised scheme (ie untouched).  This means you can't take it until you are 55 (or 57  if you are young enough for that change to impact you).  It won't have affected how much you can invest in pensions yourself (annual allowance).

Therefore you have to leave the money in a pension, which means you need to decide how to invest it.  This will depend on how long you can wait before you need it and how you balance the need to protect the money (but at risk of inflation) or to grow the money (at risk of market going down as well as up).  I would just use the pension pot to invest - and not necessarily in different things from the lump sum.  Be careful when (in a few years) you decide to take money out as it can impact some benefits and can limit how much more you can put in.

Hope that helps

Marcon

unsync said:

Hi, I have been awarded a lump sum and small pension pot as part of a divorce settlement. I have paid off debt and will invest remaining lump sum. I don't know what to do with the pension. I'm under 55 and don't work (ill health), but I do get Carer's Allowance. The pot is circa £40k. What is the best thing to do with it please.

First thing to check is whether you actually need to 'do' anything with the pension money. Can it stay where it is, albeit transferred to a new pot with your name on it?

unsync

Thanks, I need to find that out.

Flugelhorn

Agree it has to stay part of a pension, I know of people who have had this and the pension provider has opened another scheme for them (one was fire service) 

Albermarle

This govt website is a useful source of info on pensions and other money matters .

Free and impartial help with money, backed by the government | MoneyHelper

unsync

Thank you all for your replies. It is my intention to keep it as a pension for as long as possible, at least 10 years.