Is this a reasonable financial split? WWYD

[Secretsout]

Long term lurker on this board. Divorcing after a long marriage (20+ years), years of EA. 2 teens 16&14.

He earns about £175k, I earn £10k (recently gave up employment to set up a business with his full support). I've worked all of my life except for the last 6 months.

£300k equity in house, own 2 other houses that rent at £800 total per month - equity £30k. His pension is £220k, mine is £80k (public sector, final salary but its not live as I dont work for them anymore). He has £35k sat in a share account and company shares of £70k when they release.

He has enough money in the £35k to set himself up in a new property and adequate income to fund his current level of lifestyle. Kids will be with me in the main. He has agreed a reasonable maintenance figure for the kids but my solicitor wants it seperated out as an amount for the kids and an amount for me - same total, but it just means I get spousal for longer than when the kids have left.

At the moment I really need capital to buy a house for us so I've asked for all the house equity plus the two rental properties. We keep our respective pensions and he keeps the shares. Does this sound reasonable? He is pushing for an amount out of the house equity, he doesn't need it, just says he deserves it. WWYD? Or do i go for a full split of everything (pension and shares).

I do have a lawyer and she has put the offer to him but she has advised me to get a pension sharing report. I dont know what to do.

[Moanranger]

I would go for 50%,of everything, which is what the law stipulates. You may in fact get more in terms of the family home if children are still under age. He will still be very comfortably off, & you will have your fair share. Good luck!

[tadpole73]

I'm in a similar situation and was told I'd have to give him the two rental properties and for me to stay in the marital home. Our equities are similar to yours. They basically base it on the lower earner getting 69-70% total equity. If you find a lawyer who would give you all of the properties, please tell me as I'd like them to represent me.
I'd be amazed, sorry, if you were awarded the three houses despite his pension and earnings being higher.

[Secretsout]

Thanks for the comments.

baby my sol seems very good, she understands my need for capital as I can't secure a mortgage as I do not have an income so the equity from the FMH would give me and the kids a home.

tadpole I'm asking for the two rentals as an income source and possibly in lieu of SM. I'm unable to stay in the FMH, it's not an option as it's very costly to run and the mortgage is £££.

The fact is his earnings will be hundreds of thousands (if not millions) of pounds over the next 15 years to his retirement. Mine will be nowhere near that.

I think I'm just very torn between what I've asked for to suit my needs now as opppsed to considering how I'll cope in retirement and should I be looking at pension and share sharing?

[tadpole73]

Bear in mind if you have a rental property, this will affect your tax credits.
I understand your pain as I'm considering similar, but sometimes you have to go with what's best now, not at retirement. You will meet someone else who may have a house etc, so don't focus too much on retirement, you never know what's round the corner.

[JanetBrown2015]

220k and 80k pensions are very low. In fact your public sector one might well pay a much higher payment out when you retire than his private sector £220k pot which is likely to lead to a pensino of under £10k before tax when he's 65 - 70. I suspect it may be a lot easier not to pay the cost of valuation of the pensions and each keep your own on the basis of the fact they are worth about the same.

On the rental properties have you both done the calculations based on the new interest deduction rules? They do mean for 40%+ tax payers sometimes the mortgage is now higher than the rents so it is not worth keeping the properties from this tax year. However if they were in your name with low income that might change so make sure any comparison of your situations takes that into account although give your own earnings there is probably no hope the buy to lets would be moved into your name so it may be necessary to sell them off for the £30k equity less sale costs.

I cannot see how the buy to let lenders will agree to transfer the mortgages just to your name so that's probably not an option.

[Secretsout]

Thank you janet it's interesting about the pensions, although mine is CETV of £80k it seems pretty rubbish as it's £14k lump sum and £100 per week and I'm no longer in it as I'm not employed there anymore.

I do feel keeping our own pensions seems wise.

The rentals were placed in my sole name - for the purposes of the tax situation - but were bought out of joint funds. Mortgages in my name.

[JanetBrown2015]

Very roughly £100k in the fund (for private sector pensions) buys a pension of £5000 a year so £200k in a fund would be a £10k a year pension. That is your husband's and £100 a week is about £5200 a year. So if I'm right then yours might be half your husband's I suppose. You probably both have another 20 years of full time work to build up future pensions.

If he took out a 25% lump sum as you propose that would leave his fund at £165k so actually his pension would be more like £9k a year I suppose if he like you took the lump sum. I just don't think the difference between you both is so different pension splitting is going necessarily to be ordered if it went to court. But I am by no means an expert. My ex and I after 20 years married each kept our pensions - he had a teachers pension and I had a private one with no employer contribution - we decided they were both worth about the same and we would be working for another 25 years anyway so could contribute more later if we could afford it ( I just cashed mine in entirely recently at 55 to give to the older children for housing with a large chunk given to HMRC but that was my choice as I want to work until I die). By the way the pension is often a couple's biggest asset, more than equity in the house and too many people don't consider it so I am not saying ignore it as an issue in the finances.

Are you going to stay in the current house and buy him out of that or he gets the equity when youngest child is 18 or you cohabit or something like that?

[Secretsout]

No janet I'm not proposing he take 25% out of his pension. My question is that is it reasonable for me to have 100% of house equity because I need capital and the two rentals because I need income versus us sharing the houses, pensions and shares? I can't stay in the house, no means to afford the mortgage payments. He has enough money in shares and a big enough income to buy a substantial property for himself.