pensions on divorce

[spottybegonia]

hi all, I'm a regular here but namechanged - just looking for some guidance/advice from the mumsnet hive brain.

My partner left his wife two years ago, and had an income twice hers (hers is mid 30ks). He's recently earned a promotion that takes him up to 3x her income. His pension is 8x hers. He moved out of the family home and is renting, but also paying half the mortgage and has been since he moved out. He has always paid the full mortgage until then, and most household bills. He also pays child maintenance for his kids, despite one of them being with him 50/50.

She has a longterm health condition that has been in remission for years but suddenly she is saying she is disabled and her long-term employment is looking increasingly unlikely due to her deteriorating health (trying my hardest not to be cynical about this).

They are now planning to divorce, but his wife is refusing to leave the family home, and believes she is entitled to remain in the house (270k equity), and 'give him 50k' from the equity for him to 'move on without making a fuss'. She also believes she's entitled to spousal maintenance and child maintenance, including for one child who is almost 18. She also says she has been advised by a solicitor that she is entitled to 50% of his pension. He has said he'd be happy to consider giving her the house outright with a small amount for a deposit for himself, but that's looking increasingly unlikely.

Does this all sound accurate? I'm trying to be Switzerland as I can appreciate it's very difficult for her to need to change her standard of living, but at the same time I can't imagine not wanting a clean break and to try to move on as amicably as possible.

Grateful for any insight into whether she's within her rights with these demands (I know she isn't with the spousal maintenance!).

Thanks everyone.

It's certainly true that the value of pensions is treated as something to be split on divorce. That doesn't mean it will be 50/50. Will also need to consider ages of children, time before retirement, value of other assets. One does hear of cases when the wife gets the house (or most of it) in return for 0% of the pensions; if going for 50% of the pension then he could go for 50% of the equity, particularly if that still enables children (i.e. the under-18s) to be housed.

I'm a family lawyer.
I wouldn't be so sure that spousal maintenance is out of the question here.
Pension sharing is usual after a long marriage, but a very complex area where actuarial reports are sometimes required.
It's is not about 'entitlement' but more about meeting income and capital needs, including housing, in a way that is reasonable within the specific circumstances.
Financial settlements are incredibly case specific so you really need to seek proper legal advice.

In a long marriage it is usual to divide assets 50/50. Pensions are complicated and in my divorce we employed an actuary who looked at how our incomes would be equalised at retirement.

His wife can make an offer but how reasonable that is needs legal and actuarial advice. Also don't discount spousal support. You may not believe she is disabled but with a long term health condition and whatever the pandemic has thrown at the family she may be now. Do not underestimate the stress of divorce. My health has taken a hit and I didn't have to homeschool.

Your partner needs qualified legal advice.

If he has left one woman he can do it again so checking out where you stand if he dies or leaves might be worth it.

If they are amicable enough to be able to think about eachother's needs and consider solutions that work for both sides, then mediation or collaborative law would be really useful.

She does seem well informed about pensions and housing. Her disability will be relevant, and to avoid any unpleasant exaggeration or belittling of her heath condition and its impact, it is a good idea to get an expert medical report. That will tell both sides about prognosis, costs of future medical needs, impact on earning capacity etc. It can be daunting for the I'll person, though, as it is very bleak reading about your own disability in black and white and having to face the reality of a degenerative disease face on.

It's always best if both sides get legal advice, but it can be from the same collaborative lawyer to save costs if there's sufficient trust on both sides.

I was in a long marriage and got all the equity and half of ExH pension also due to his being much higher than mine. Of he has large pension assets she may well get the entire house If it was a long marriage. They will also take into account future earning potential and disability will be considered.

He needs to see a solicitor and ask.

One does hear of cases when the wife gets the house (or most of it) in return for 0% of the pensions

In a long marriage with unequal earnings and pensions they could also get a share of the pension in addition to house.

@AutumnColours9

Surely there must be some very specific circumstances for you to come away with half his pension and the house? For example, there must be a lot of other assets that he has taken or sufficient time for him to purchase another property and clear the mortgage before retirement?

My experience of disability and future earnings being considered was pretty much that they don't count for anything. I'm disabled, exH has much higher future earnings capacity. We still had a 50/50 split even though I have 3DC full time.

I might be disabled and likely to retire in 3-5 years, but that didn't seem to count for anything because my current budget balances ...

@AutumnColours9 must have been very specific circumstances.

@HosannainExcelSheets

The UK Government does seem to be behind a lot of this, perhaps because of all the philandering that goes on with Johnson and Hancock for example!

It's really interesting how in the past 10 years they've made it increasingly difficult to provide the financially weaker party with an income without it reducing their benefits. I do wonder whether in your case your access to disability benefits actually counted against you, as it widened the "gap" that your ex would have to pay (i.e. the "gap" for me is £850 - I could pay my STBX that in spousal and she would simply lose her £850 UC. So I'd have to pay her more to afford it, which I clearly cannot do).

No other assets but we are 25 years away from retirement so have time to remortgage. We married very young hence long marriage. Sometimes one partner is awarded more than 50 percent of pension due to life expectancy etc and housing children and the compromise on their earning ability if they were the homemaker. If they are awarded say 65 percent they can trade some of that for more equity as a percentage. These things would be dealt with by an actuary which costs a lot. Obviously depends on equity and pension value as you say specific to case. Usually happens more in long marriages with large pensions (500K) and earning discrepancy. The aim is to equalise income.

@AutumnColours9

You still seem to have come off with a very good deal. I hope there are unique circumstances in your case (e.g. very little equity or other assets) because that would be a very unfair outcome in mine!

I know I'm going to be penalised for spending my evenings studying rather than getting drunk before we met - and for finding another job before quitting the old one - on some spurious claim that these were mutual decisions but hopefully not by that much!

The financial cost of seperation and divorce is crippling.. if there is noone else involved you may be able to come to an amicable agreement. I would try everything to avoid it if it at all possible still. It has been gruelling for me and as you say my settlement was reasonable.

Yes, in my case PIP and DLA for one child were very much taken I to account, even though I have a variable level of disability and might get that removed any time. My income could halve overnight, and no one seemed to care

It's so frustrating, as my ex is self employed and wiped 90% off the value of his business before we got to court. He also drippy his salary massively and never declared all his income to HMRC anyway. He got away with it all.

@AutumnColours9

With divorce being on the one hand financially crippling and on the other hand inevitable in my case, I'd rather do it sooner than later. 10 years down the line my STBX would still have a claim of more of the assets from what by then will be a much bigger pot. Better to give her 25% of my earnings over the next decade than 70%.

I second @Arcadia’s advice. Get a lawyer and a pensions actuary involved. Just paid a large bill for both, but it was worth it in the end.
I would have needed a PhD in pensions to get it sorted… so, so complicated.

If your DP drags this through the courts it will end up costing a lot of money on solicitor fees.
Realistically most divorces start with a baseline of each party getting 50% of the total assets - pension, house equity etc. Most divorces aim for a “clean break” so without spousal maintenance (child maintenance is separate as that is for the children) so the ex wife might get more of the relative equity to compensate for the lower earnings or if she gave up work to look after the children when they were younger.
The total pension pot is considered as an asset but depending on how far your DP and his wife are from pensionable age will be taken into account.
He really needs legal advice but obviously her solicitor will push for the best deal for her.