Pensions and divorce?

[Mumof3confused]

I’m thinking of separating with my husband and need to get my ducks in a row. We have an enormous amount of equity in our house but I would rather not sell it if I can help it - would love to keep it for the sake of the children’s stability.

There’s no way I would buy my husband out (of why didn’t I get a prenup signed, I would have been in a great position right now as the deposit was almost all mine).

He does have a final salary pension scheme (teachers pension) and I have no pension savings. I know that pensions are taken into account but how might this play into the shared ‘pot’? I’ve no way of finding out what his pension may be worth without asking him and I’m not at that stage yet.

Is it simply a case of 50:50 entitlement? Ie:
Equity worth £200k
Pension worth £200k
Therefore, if I give up my share of his pension I could trade this for his share of the house?

I can afford to take on our mortgage repayments as it currently stands but I wouldn’t be able to take out any more borrowing in terms of a mortgage based on my salary even though we have about 70% loan to value.

Just want to figure out the likelihood of being able to stay in the family home. He would not be able to buy me out.

My XH is on a final salary pension and the courts demanded an actuary report which I STRONGLY recommend. To save up a normal pension to achieve the same pay out of the proportion of his pension I would have had to squirrel away 300k.
Don’t sell yourself short. This will be an important consideration in dividing other assets and as you have no savings you NEED a pension. Just because he can’t access until a certain age doesn’t mean you can’t - the actuary will advise on this.
If he is anything like my ex he will fight this tooth and nail knowing what the pension is worth.

Thanks @NosyJosie can you remember what the fee for this report was at all?

Around £1200 and we split the cost. It was ordered by the court at the first hearing as he had refused to even consider it in negotiations. The cetv valuation is pointless for final salary pensions so don’t be fobbed off with that. It was worth every penny and a leveller for agreeing who got what equity etc.

@NosyJosie thank you, that sounds reasonable and yes I have understood that the CETV valuation is not reliable with final salary pensions.

Good luck. The actuary report was excellent and showed exactly who got what to achieve equality in pension. Then the rest of the discussion in court was around the split of assets and equity to reach a fair solution and the court strongly considers the needs of the children depending on who has them when. Get absolute clarity on what is and is not covered in child support etc.

I've been reading about pensions and divorce. Yes, an Actuary is needed for a final salary pension calculations. It can be a bigger asset than the house.

Google advicenow.org.uk; 'A Survival Guide to Pensions and Divorce'; 65 page document. Even skimming the first half had my jaw on the floor.

That's exactly what I did. A roof over my family's head was more important than a pension in 30 years time. I remorgaged and kept the equity. He had the money from some insurance policies and all his pension. It worked for us. He's retired now and I will finishing paying for the house this year. I now have a very good pension myself too.

@CorrBlimeyGG

Talk to a solicitor, not a financial advisor.

As Bungle notes, pensions are not treated in the same way as equity, as it is not immediately available, and cannot be cashed out in the same way that a property can.

Think long term as well as short, do you have time to build up your own pension? Would the lender allow you to take over the mortgage?

This is not entirely true, On the D81, Financial disclosure, pension ARE treated as equity and need to be properly valued. And they can be “cashed”. A pension order can be made ..slightly different process if it’s a defined benefit vs defined contribution pension. Defined benefit are very complex to value and it is almost always better that equity is used to offset the value of them rather than a pension order as everyone looses out from the employer being forced to covert a final salary into a partial defined contribution which is normally the only option. The only pension that is not included is the State pension. That can’t be split.