Both agreeing on dissolution

strugglinginDevon

Good evening everyone

Long time lurked on this website (years), and the forum, but first time poster.

My partner and I have been together for almost 19 years, and in a civil partnership for the last 14 months. Sadly, we’ve realised we’ve fallen out of love.

We are still great friends, its just the spark has gone.

We have no children or pets to fight over.

We own our house, although it’s only in my name (male) on the mortgage as when we met I was already buying it. My partner moved in and we started sharing bills, mortgage payments etc.

We want a quick, clean, hassle free separation/dissolution. We’ve agreed that I would like to buy her out of the house, as it’s in the same town that I grew up, and where I work.

She has just reached (private) pension age (she 57, me 49), so could I agree to technically buy her out of the house with a percentage of my pension as financial settlement for a clean separation? My pension is approx 9 times the value of hers.

As I said, we are still great friends, we never argue, we have never argued, and just want to move on. She wants to move away, start afresh and buy a home.

Also, if the pension split is agreed between the pair of us, would the funds transfer into her much smaller pension, or would it transfer into her bank/savings/current account as a cash sum, which she is hoping to use to buy a home.

Many thanks in advance for your replies and apologies if I have missed anything (please ask).

poseidon1

Certainly doable as set out in the article below

https://adviser.royallondon.com/technical-central/pensions/pensions-and-divorce/pensions-sharing-on-divorce/

However, If your DC pension pot is heavily exposed to equities and bonds ( as most are), you will have noticed values diminishing steadily since the outbreak of the ill considered Iran war, with likely more pain to come as oil prices continue to rise and the spectre of a world recession begins to look like a possibility.

Transferring your pot out of equities into a cash fund now, would stem the decline but also mean locking in losses which have already accrued.

Therefore very unfortunate timing to be using this as a basis to buy out your partner's equity share in the property.

strugglinginDevon

Thank you for your reply Poseidon1.

Yes the vast majority of my DC SIPP is exposed to US weighted funds and tech stock so it has slipped back 10% since the conflict in the Middle East. i saw a similar slip when tariffs were announced early last year. We are only discussing it at present and doing our research.

I've got a few questions for anyone who may be able to help, hope its OK to ask on here:

Will we still need a solicitor if we agree on everything, and do a joint application online?

Will we be required to physically attend court at any point if we agree on it all?

Will we need a Mediation Information Assessment Meeting (MIAM, we saw it mentioned on the application form) if we are in full agreement?

How is the money split dealt with, after the Final Order will I get a set amount of time to transfer the agreed sum to my ex-partner?

If the funds are coming from my SIPP, will they go into her SIPP, or could they go into her current account to use for a house purchase? Who would make that decision?

Thank you again in advance

poseidon1

In my view the complexity of the pension sharing process even in the case of an amicable parting of ways , strongly indicates legal representation on both sides to efficiently navigate the divorce and subsequent financial settlement to a successful conclusion.

The questions you asked indicates you undertaken no research at at all and will therefore struggle from outset to handle this matter without professional assistance.

The article below provides a broad brush indication of the process from the pension provider point of view, and makes useful reading in advance of appointing solicitors to represent you both -

https://www.investcentre.co.uk/articles/implementing-pension-sharing-order-divorce-step-step-guide?_gl=1*1tf6ddt*_up*MQ..*_ga*MTcyNjUzNTYzOS4xNzc1MDQ1ODk4*_ga_QEE3BN15X5*czE3NzUwNDU4OTgkbzEkZzAkdDE3NzUwNDU4OTgkajYwJGwwJGgxNDUyMjU4NDA1

Albermarle

She has just reached (private) pension age (she 57, me 49), so could I agree to technically buy her out of the house with a percentage of my pension as financial settlement for a clean separation? My pension is approx 9 times the value of hers

This kind of juggling of assets is quite normal, with normally an objective that you both end up with approx 50% of the total.

As part of a divorce, it is much better if there is a legal agreement on how assets are split. This stops the possibility of issues being resurrected in future, maybe when new partners come along.

It does not have to be confrontational, although with lawyers involved that can be a problem.

Regarding the recent drop in value of your SIPP, I think this is a relatively minor issue in the great scheme of things. A US/tech heavy portfolio will have done very well in recent years, despite the current drop/situation, which will no doubt have changed by the time you get to the point of transferring some of it anyway. However could make sense to move at least some of it to lower risk assets/cash for now.

If the funds are coming from my SIPP, will they go into her SIPP, or could they go into her current account to use for a house purchase? Who would make that decision?

They will have to go to a DC pension of hers ( a SIPP being just a type of DC pension). Then usual pension withdrawal rules will apply. 25% tax free; 75% taxable income. As she is 57 she could start to withdraw at any time. However she should be careful in that withdrawing pension money for other purposes could leave her in a poor financial situation when she retires. On the other hand not great to be renting when you are older.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81948555#Comment_81948555

Points made here reinforce the need for independent representation for each party in my view.

Amicable as this all appears to be, the wife may end up getting the short end of the financial stick with no roof over her head and limited/expensive ( in tax terms) access to her capital settlement via transferred (volatile) pension rights whilst OP retains tax free access to more stable residential property equity.

Have already seen on other MSE forums, wives expressing considerable confusion and distress over the outcome of their pension sharing entitlements ( and implications flowing therefrom), because they were not legally advised and therefore did not properly appreciate what they had signed off on.

We have the OP's view of the matter, but with no indication of the wife's level of financial understanding and competency. Not a good sign the wife seems to have inadequate pension provision of her own, in this regard.

strugglinginDevon

https://forums.moneysavingexpert.com/discussion/comment/81946070#Comment_81946070

Thanks again Poseidon1, and you are right we haven't done any research as yet, hence me being here. We've looked at the online application and it doesn't look too complicated, between us we've completed 2 x probate applications in the last 2 years without any legal assistance/solicitors so we aren't new to paperwork.

We've had a read of the PSO and now understand the process (we both have our pensions with AJ Bell as it goes).

strugglinginDevon

This kind of juggling of assets is quite normal, with normally an objective that you both end up with approx 50% of the total.

As part of a divorce, it is much better if there is a legal agreement on how assets are split. This stops the possibility of issues being resurrected in future, maybe when new partners come along.

It does not have to be confrontational, although with lawyers involved that can be a problem.

Regarding the recent drop in value of your SIPP, I think this is a relatively minor issue in the great scheme of things. A US/tech heavy portfolio will have done very well in recent years, despite the current drop/situation, which will no doubt have changed by the time you get to the point of transferring some of it anyway. However could make sense to move at least some of it to lower risk assets/cash for now.

Hi Albermarle, many thanks. Would the pair of us attending a solicitors together and sitting down to get something drawn up as a legal agreement help? We want to avoid involving 2 solicitors if possible and it turning into a cajoled drawn out and costly seperation.

I've been very fortunate the last 4 or 5 years with my tech heavy SIPP and the recent drop/correction so not too worried to be honest. Id imagine when the Pension sharing Order comes it will be end of 2026/early 2027 so things may have changed in that time. I will look at lower risk/cash for some of it. (I have been reading a few of your posts elsewhere on the MSE forum over the last few days)

They will have to go to a DC pension of hers ( a SIPP being just a type of DC pension). Then usual pension withdrawal rules will apply. 25% tax free; 75% taxable income. As she is 57 she could start to withdraw at any time. However she should be careful in that withdrawing pension money for other purposes could leave her in a poor financial situation when she retires. On the other hand not great to be renting when you are older.

Thanks for clarifying. The PSO would be between 2 x AJ Bell SIPP's. She does have a fairly healthy S&S ISA and investment account, as do I (they are almost identical in holdings and value) so they could be an option for a home purchase (which I will help her with).

I think the real question I was trying to ask, but was a little too cautious to is…. "Can i technically buy my partner out of the home with my larger pension?" and I think you've answered that Albermarle.

Thanks again all for your replies so far

Albermarle

Would the pair of us attending a solicitors together and sitting down to get something drawn up as a legal agreement help? We want to avoid involving 2 solicitors if possible and it turning into a cajoled drawn out and costly seperation

There are professional mediators, and that is often the first step before going to solicitors.

Using mediation to help you separate - Citizens Advice

strugglinginDevon

https://forums.moneysavingexpert.com/discussion/comment/81950724#Comment_81950724

Thanks again Albermarle. We don't actually need mediation or solicitors to fight for us, I only asked about a solicitor to get something legally binding in writing that may help get the dissolution signed off.

Would the courts possibly not agree to signing it off if we didnt involve solicitors? If the overall finances were split pretty much 50/50?

jackieblack

The judge will want evidence that you've both had independent legal advice as to what you are each legally entitled to - my ex-husband had a free half hour with a local solicitor to achieve this, although we had already come to an agreement we were both happy with