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Divorce and pensions

(21 Posts)
Stelmosfire Sun 24-Feb-13 20:47:30

Some background

Married 20yrs separated 3, have sorted everything financially apart from pensions. Both bought own properties. Children now 22 and19. He now earns over 3 times what I earn and I have a tiny pension having only started paying in 5 yrs ago, his by contrast is good.

We hope to come to an agreement for me to share some of his rather than go through solicitors and the expense it entails but I really don't know what is fair.

He is refusing to get current valuations and wants to work from valuations we got about 2 yrs ago. Is that what a solicitor would advise?

I'm a bit lost and would really appreciate any advice x

Collaborate Sun 24-Feb-13 21:52:24

If you're dealing with pensions that have transfer values of hundreds if thousands you'd be bonkers to try and do it in the cheap without proper legal and financial advice.

MOSagain Mon 25-Feb-13 08:01:42

Agree with Collaborate you need to invest in your future by instruction a specialist family lawyer to advise you. He will have to provide current valuations. Have a look at the Resolution website and find a family lawyer in your area.

babybarrister Mon 25-Feb-13 11:42:08

totally agree - it is likely you will need a proper actuarial valuation. Remember that as a starting point you will need more than half as you will live longer! DO NOT carve this up around the kitchen table - get some proper advice please!

betterthanever Mon 25-Feb-13 15:54:51

Or the bank/financial institution may do it free

mumblechum1 Mon 25-Feb-13 15:56:44

Usually the pension co. will provide a CETV valuation once for free,but an actuarial report would normally cost a few hundred quid.

AS Collaborate, MOS and BB have said, though, spending £500 on an acuarial valuation is going to be well worth it if the pension is worth a couple of hundred thousand pounds which they very often are.

Spero Mon 25-Feb-13 16:03:20

You need an up to date CETV definitely, but in terms of more detailed reports, I am not sure it is worth it. Last case I did, pensions were approx £300k and £154k. The other side wanted to come back for another hearing(!) after appointing an expert to value both pensions.

I suggested we simply add them up and divide by two and transfer whatever from the bigger pension pot gave 50% to both. DJ agreed that was the best thing, so that is what we did.

Courts generally want to take quite a broad brush approach to valuations as most cases don't involve enough spare money to provide valuations of every asset.

But definitely DONT reach agreement over the kitchen table. Worth getting advice at initial stage to make sure you are on right track.

Stelmosfire Mon 25-Feb-13 17:10:27

Thanks everyone for taking the time to reply.

I think I need to get a solicitors advice if only to give me an idea of what would be a fair settlement as I don't have a clue where to start from.

Spero Mon 25-Feb-13 17:38:42

After 20 years and you having tiny pension - presumably because you compromised your earning capacity to bear and raise children - the starting point is to split pensions equally.

babybarrister Mon 25-Feb-13 19:09:21

Actually I slightly disagree - starting point should be future equality of income which involves more for wife as we live longergrin

ZenNudist Mon 25-Feb-13 19:17:10

2 years is a long time in economic terms. presumably you've both been paying in since then? Depending on how his investments have performed since then the value of his pension could have gone up, it could also have gone down. It depends on his investment strategy. I'd bet it's gone up, especially if he's asking to use old valuations. Personally I'd want an up to date actuatial valuation of both pensions and legal advice about fairest split and to deal with any challenge from your ex.

fuckwittery Mon 25-Feb-13 20:50:00

What babybarrister said - there is a big difference between equalising income post retirement and just splitting the pension value.
You really should get legal advice - if the pension is the only issue it shouldn't be that expensive a few hours perhaps to advise and draw up an agreement, and actuarial reports are about £500 to £750 - well worth it. It's really important to take advice, have a read here about some of the issues

And the actual legal process for making a pension sharing order is pretty difficult to do acting in person, and it is not possible to share a pension without a court order (although you can get a court order on the papers, if you both consent, without a need to attend court).
See here regarding the process:

fuckwittery Mon 25-Feb-13 20:50:41

*can be a big difference

Spero Mon 25-Feb-13 21:39:53

Yes, good point.

But you may want to take a view at some stage whether you go for a rough and ready agreement or down the line of contested hearings and paying out for expert valuations - the costs of court proceedings can eat away any advantage gained and the court is very unlikely to make orders for either side to pay the others costs. It is also emotionally very draining to have this kind of thing hanging over you.

But that equally doesn't mean you should take less than you are comfortable with. Get some initial advice based on a least a recent CETV of both your pensions and take it from there. Hopefully you can hammer out an agreement and remain amicable, without the cost of legal proceedings.

Stelmosfire Wed 27-Feb-13 06:59:38

Thank you all so much for your help. I've had this on my mind for ages and you have given me some excellent advice and helped ease the worry a little

BlooMoon Sat 02-Mar-13 16:57:03

Is it still the case that a female needs a larger share to equalise income, now that the legislation has come into force preventing insurance companies from discriminating according to gender?

I thought that annuities were now gender-neutral?

Spero Sat 02-Mar-13 17:11:38

Well it wasn't a debate any of us had in the last case I did. Life is full of variables, you cannot account for everything and actuarial tables are not cast iron predictions. I suggested the simplest way forward was just add up both CETVs and divide by two - judge agreed. But they had spent about £60k on costs between them by that point.

Collaborate Sat 02-Mar-13 22:19:02

The gender neutral annuities rule doesn't apply to defined benefit schemes (final salary). It's very dangerous trying to compare defined benefit schemes with money purchase (or for that matter other defined benefit schemes) and unless the pensions are worth buttons most solicitors will advise clients to get professional actuarial/IFA advice. Can be very costly on the insurance premiums and most solicitors (me included!) don't know enough about this area to be able to advise fully as to all the implications.

STIDW Sat 02-Mar-13 23:46:34

There is divorce pensions consultancy which reckons as many as half of all divorce settlements in the UK since December 2000 may have had the pension undervalued and around 750,000 people may be entitled to claim thousands of pounds from their former divorce lawyers if the solicitors undervalued the pension of their client’s former spouse. The numbers may be an exaggeration but with negligence solicitors offering divorcees "no win, no fee" services if I was a solicitor I would want to cover my back.

babybarrister Sun 03-Mar-13 14:17:07

I agree - actuarial reports can show a 45:55 split

mrsmalcolmreynolds Tue 05-Mar-13 22:35:12

Glad to see you're getting specialist advice, it really is the best idea. Your STBXH was being ridiculous about using old CETVs - as someone else said you are entitled to one per scheme free each year. Just a word of warning, do ask your solicitor about their specific experience of pension sharing - I am a specialist pensions solicitor and some of the stuff we see from family law specialists is shocking. Even the Courts don't seem to understand what makes a valid PSO half the time.

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