Trading pension for equity … how to calculate

[Notmyyearthisyear]

Hi
If the other party’s pension pot CETV is approximately £100000 more than yours (yes, I know it’s not a great one but much better than mine anyway), how would you approximate the value of half of it in terms of it being comparable to equity? I’ve seen somewhere than x 0.7 is an approximate cash/equity value but is this accurate?
Thanks in advance

Are you getting a pensions expert report? If so, it's one of the questions that you can ask to be included.

I think the guidance is that if there are pensions worth more than £100k and/or they include a final salary/defined benefits pension, then a report is needed.

There is no actuarially sound method of doing this, I'm afraid. An actuary can do a report and suggest a calculation, but there isn't really an accepted fair method.

Sorry!

So if there isn’t an accepted method, how do people approach this when negotiating? Getting an actuary seems to be a bit of a waste of money if that’s the case. I mean, it’s a fairly straightforward figure, or so it would appear, a single pot with no defined benefits etc. If anyone here has been through the process and can share their experience that would be great.

Basically a pension cannot be accessed until age 55 (and that age is likely to increase in the next budget to 57) and it is subject to tax. 70% is an okay rule of thumb for a basic rate taxpayer but it could be worth even less for a higher rate taxpayer. Age will be a factor too - just how long away is it that the money will be accessible? Ideally you need to get advice based on all the facts to give it a true valuation.

@MrsBertBibby

There is no actuarially sound method of doing this, I'm afraid. An actuary can do a report and suggest a calculation, but there isn't really an accepted fair method.

Sorry!

Ah, that explains why my pensions expert didn't really answer that point - they gave a range which might be considered.

It didn't matter in my case as we didn't trade equity for pensions at all.

The trouble is with divorce is that it boils down to what you'll agree on.
What do you think is fair?
What are you prepared to accept?
Ditto for your other half.
An actuary report is £2-3k,takes forever and can still be haggled over.

Fair is so you can both start again on an equal footing, mindful of factors like kids and lost potential income etc. How big an influence does this pension amount have on the overall picture.
People seem to get very possessive of pensions so it may be worth more to your ex than to you.
I think your 0.7 calculation is a good place to start. So £35k equity. I'd drop to 30k without a quibble to avoid actuary and solicitor costs and time of arguing about it. But only you can decide what you'll accept below that.