It’s vital to have an accurate valuation of all pensions held by both parties in order to determine how those pensions can be split. You’ll need to speak to the provider of each scheme to get an up-to-date valuation, making sure to track down any pots that may have been lost along the way. The pensions will need to be valued at the date of the divorce or dissolution, unless you’re in Scotland, in which case only the increase in value of the pension during the marriage or civil partnership will be calculated (the pensions value date will therefore be the date of separation).
Sharing a pension in divorce isn’t compulsory, and you may decide to make an informal agreement with your former spouse to that effect. However, the agreement will still need to be legally documented, so you’ll need to take suitable legal advice. It is also advisable to seek a pension option report from an independent financial adviser and/or actuary. This is so you can look at all of the pension options and make an informed decision about how to proceed.
In this scenario, each party will keep his or her own pension, as pensions only be shared by way of a pension sharing or attachment order by a court, in the case of the dissolution of a marriage or civil partnership.
Your first port of call should be a financial adviser or actuary, and you’ll need legal advice from a solicitor too. However, you can also get impartial support and information from a pensions’ specialist at The Pensions Advisory Service by calling 0800 011 3797.
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Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.