Pensions and divorce

xylophone

You mention that you have modest (joint)? savings.

Not using some part of these on paying for professional advice could prove a false economy in the long run?

snowlaser

I got divorced in 2010.  It was reasonably amicable, and I did very much what you're talking about i.e. we both kept our pensions intact and did a settlement via a "balancing item".

Firstly there is no way to achieve a perfect fair split, especially when you have to weigh up pension funds (whose values change daily) against houses (whose values move much more slowly).  So it's just about being broadly fair.

I think it is *simpler* to avoid splitting the pensions via a Pension Sharing Order, and cheaper right now since you don't need to pay for "official" CETV for divorce figures.  Obviously you have to be careful it doesn't leave one party with an inadequate retirement provision if (say) you keep the house but then have an inadequate pension.

As others have said, using the latest CETV for transfer out purposes is as good a way as any to compare pensions, and gives you a capital figure for DB pensions that can be weighed against DC pensions or other assets like a house.

Then you and your husband can agree what you think is a fair split of total assets, and then decide what amount one party gives to the other to balance it out.  

Finally of course you will need a Consent Order to make the split legally binding - but I presume you have a divorce lawyer who can advise you on that.

I would NOT try and work out pensions based on a projection of income.  You will get wildly different answers depending upon what assumptions you plug into it, and it will be hard to turn any answer into a "so what should I give him/her now" figure.  I would DEFINITELY NOT go down the route of a pensions earmarking order, which would tie you financially to your ex-spouse for the rest of your life.  A clean break is so much better.

Marcon

snowlaser said:

Finally of course you will need a Consent Order to make the split legally binding - but I presume you have a divorce lawyer who can advise you on that.

I would NOT try and work out pensions based on a projection of income.  You will get wildly different answers depending upon what assumptions you plug into it, and it will be hard to turn any answer into a "so what should I give him/her now" figure.  I would DEFINITELY NOT go down the route of a pensions earmarking order, which would tie you financially to your ex-spouse for the rest of your life.  A clean break is so much better.

OP has already said this: 'We don't want to get solicitors involved and I can't afford to pay for IFA as I have debts to clear, will have a new mortgage to pay and potentially a pension to start paying more in to'.

Ensuring full and proper consideration of pensions (especially the spouse's police pension. If a Pension Sharing Order is granted OP will become a 'pension credit' member of that scheme, which means having benefits in their own name within the scheme - a very attractive option) might mean not having to pay nearly as much in future pension contributions, so avoiding taking advice now could be extremely expensive in the long run, however tempting it must look to do so.

Emmia

Marcon said:

snowlaser said:

Finally of course you will need a Consent Order to make the split legally binding - but I presume you have a divorce lawyer who can advise you on that.

I would NOT try and work out pensions based on a projection of income.  You will get wildly different answers depending upon what assumptions you plug into it, and it will be hard to turn any answer into a "so what should I give him/her now" figure.  I would DEFINITELY NOT go down the route of a pensions earmarking order, which would tie you financially to your ex-spouse for the rest of your life.  A clean break is so much better.

OP has already said this: 'We don't want to get solicitors involved and I can't afford to pay for IFA as I have debts to clear, will have a new mortgage to pay and potentially a pension to start paying more in to'.

Ensuring full and proper consideration of pensions (especially the spouse's police pension. If a Pension Sharing Order is granted OP will become a 'pension credit' member of that scheme, which means having benefits in their own name within the scheme - a very attractive option) might mean not having to pay nearly as much in future pension contributions, so avoiding taking advice now could be extremely expensive in the long run, however tempting it must look to do so.

Personally on a DB pension I would very much look at the options for taking a slice of guaranteed income, which gets uprated for life. 

Legal advice looks expensive now, but could pay for itself many times over in ensuring you're not shafted later on. 

TurtleyMe

No cobbler_tone that is probably fair, there is just such a lot to process besides all the emotional side and it wasn't something I saw coming or planned for.  The suggestion to write it down and split it based on cetv values (once we have them all) plus other assets and liabilities makes sense. My only concern with that is that because his pension is so much better he in theory would prob not get anything from the house if we did a 50:%0 split, however that is not fair or equitable as he needs to be able to put a deposit down. However it could be a good starting point and then maybe we look at how much he needs for a deposit and go from there.  

SVaz

If he has a much larger pension,  you need a larger chunk of the House equity,  it’s really that simple if you both want things to be ‘equal’.

Presumably he’s a higher earner and will be able to afford a bigger mortgage?  

If it turned nasty and ended up going the legal route,  I doubt he’d have to share his pension if you’ve never been financially reliant on him. 

Marcon

TurtleyMe said:

No cobbler_tone that is probably fair, there is just such a lot to process besides all the emotional side and it wasn't something I saw coming or planned for.  The suggestion to write it down and split it based on cetv values (once we have them all) plus other assets and liabilities makes sense. My only concern with that is that because his pension is so much better he in theory would prob not get anything from the house if we did a 50:%0 split, however that is not fair or equitable as he needs to be able to put a deposit down. However it could be a good starting point and then maybe we look at how much he needs for a deposit and go from there.  

You're doing what so many women do - taking far too much responsibility for 'being fair' and ensuring that 'he' has 'what he needs'. How about you and your needs? Perhaps he could pay for some professional advice to ensure that the split really is 'fair'?

Cobbler_tone

Marcon said:

TurtleyMe said:

No cobbler_tone that is probably fair, there is just such a lot to process besides all the emotional side and it wasn't something I saw coming or planned for.  The suggestion to write it down and split it based on cetv values (once we have them all) plus other assets and liabilities makes sense. My only concern with that is that because his pension is so much better he in theory would prob not get anything from the house if we did a 50:%0 split, however that is not fair or equitable as he needs to be able to put a deposit down. However it could be a good starting point and then maybe we look at how much he needs for a deposit and go from there.  

You're doing what so many women do - taking far too much responsibility for 'being fair' and ensuring that 'he' has 'what he needs'. 

Not sure I quite agree with that viewpoint but a discussion for another thread!

Being fair is what any legal process will look at. With the absence of children and being 2025, they have the same stake and future earning potential. The days of anything like 'spousal support' are rapidly declining.
From the limited information it doesn't sound anyone is trying to pull a 'fast one' and the situation today is the only one that matters.

For Turtleyme (may/may not help) at the time my CETV was £670k and the house had £270k equity. My OH had very little and earnt very little but had the opportunity to increase her earning potential, which is important. i.e. no one is entitled to a meal ticket for life. It took over 4 years to complete the divorce and I limited legal bills to a few thousand. I handed 100% equity and £60k cash in order to keep my pension, i.e. I kept my clothes....and pension. Across the 4 years (I have never counted) I spent in excess of £100k clearing bills and maintaining the home for the family. Considering the split was in Jan 2019, my final payment was last month. I had no intention of buying again (rented for 4 years) but ultimately have a subsequent relationship where we are secure. My sole motivation was keeping my pension to secure my future and leave a house which was mortgage free. I thought that was 'fair' and virtually everyone around me from both sides was very supportive (and surprised) at how much I put in. Different to your situation with children, whom I maintained a great relationship with and now supporting through uni. P.S by the point of divorce in 2023 the CETV was just over £400k and it took the OH another 12 months to finally sell the house and buy something else....whilst I paid the existing mortgage. 

I think the moral of my story is that if you can both be 'content' with your share and don't fall out over a couple of grand here and there, it will make something that is possibly the worst thing you will ever go through a little easier.
Despite the 'good news' stories you might hear, divorce is rarely amicable from start to finish.
Whilst this forum will focus on the balance sheet, the best real life advice I would give is to use a mediator. It could be the best £500 you ever spend.

MallyGirl

There have certainly been posts on here around amicable and DIY divorces - right up to the point where they were no longer amicable. This could be triggered by a new partner or something else but you need to protect yourself and get a fair settlement in writing and lodged formally 

Albermarle

MallyGirl said:

There have certainly been posts on here around amicable and DIY divorces - right up to the point where they were no longer amicable. This could be triggered by a new partner or something else but you need to protect yourself and get a fair settlement in writing and lodged formally 

I think the OP already said they would look to get a consent order, once/if there was an agreed assets split, so that would at least finalise things long term, in case things were not so amicable in future.

OP - Presume you have read  the official Govt 'advice?

Money and property when you divorce or separate: Getting a financial agreement - GOV.UK