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Divorce/separation

Here you'll find divorce help and support from other Mners. For legal advice, you may find Advice Now guides useful.

Original poster

When is fair fair Pension vs House

131 replies

PaulaBawla · 23/05/2022 16:49

In the same predicament as half the country it seems DH has moved out married way too long and 2 grown up children who have fled the next and we are in the process of splitting up.

He is going for either 50/50 or me 60 him 40. The stumbling block is his pension.

Hes offered me the house (about £1m) and business t/o 250k a year in return for him getting a small cottage (about 360k and him keeping his DB pension about £630k).

Im saying I want half the pension the business and the house or I can’t afford the upkeep (which would be about 70/30 to me).

But has said that’s ok if he gets half the house?!!! (again 50/50 apart from the business) but that would mean me having to sell up which I don’t want to do.

In the end can/could the court force me to sell and does my offer seem reasonable my solicitor is hesitant and his solicitor is well not very cooperative…

OP posts:
Bonheurdupasse · 23/05/2022 16:50

What you want seems very unfair unless I'm misreading it.

Tibtab · 23/05/2022 16:57

If you’re not drip feeding another source of income, then why would you want half his pension? How much is your pension?

TinyViolins · 23/05/2022 17:02

Confused by this- do you really mean £250k per year?

His pension- is that what his DB pension has been valued at (so about £32k a year)?

DiamondBright · 23/05/2022 17:03

Do you have a pension?

OnceUponAThread · 23/05/2022 17:06

What you want seems deeply unfair.

So you want whole house - £1mn
Half pension - £315k
Business - £250k

= £1.565m

He gets half pension - £315k
Cottage - £360k

= £675k

That's a 70/30 split in your favour. Which is a massive swing your way.

There are certain things that could lead to an uneven split. Housing kids is one, but you've said they've flown the nest, so that's not in play.

We really need to know:

  1. how old you both are?
  2. do you not have any pension at all?
  3. are either / both of you still in work and what are respective earnings?
  4. potential earnings - including if one person has sacrificed earning potential - for instance by being a SAHP.
  5. scope to build pensions back up ahead of retirement
  6. any other savings / investments

Irrespective of those answers, it's hard to imagine a scenario where you'd see such a huge departure from 50/50 when there are no kids living at home. The idea is to put you both on an equal footing after the split, and to equalise retirement income.

Broadly his suggestion seems fair. Either he gives you the whole house and you leave his pension alone. Or you sell up / buy him out and both house and pension are split down the middle.

It's a needs case. You both have equal housing needs. You both have equal retirement needs. What justification is there for such a split in your favour?

Your solicitor is hesitant for a reason, mainly because what you're asking seems unlikely to be agreed by a judge (even if you could get him to agree to it).

FYI he could go for half the business too, or ask for more to offset it.

Herbyhippo · 23/05/2022 17:12

Is the business £250k turn over? If so what is the net profit on this business? Who does the work for the business? You/him/both? What income will the business generate for you on a monthly basis?

BackToTheTop · 23/05/2022 17:14

50/50 is the starting point for any financial settlement.

mocktail · 23/05/2022 17:16

@OnceUponAThread You can't really count the business the same as £250k cash though. Annual turnover is £250k, no idea what the profits are like or how much the business would be worth if she decided to sell it.

mocktail · 23/05/2022 17:19

I think you should I general aim for 50:50 including the pensions. DB pension is a huge asset and he knows it! The business is trickier though - who runs it and would you both continue to work in it? You really do need specialist advice.

OnceUponAThread · 23/05/2022 17:23

mocktail · 23/05/2022 17:16

@OnceUponAThread You can't really count the business the same as £250k cash though. Annual turnover is £250k, no idea what the profits are like or how much the business would be worth if she decided to sell it.

Do we know annual turnover is £250k? (Seems high given those pension numbers).

Typically a business is valued for divorce purposes and then treated as an asset in the pot.

Govt money site says:

Valuing a business
If you and your ex-partner (husband, wife or civil partner) own a business outright, or have a significant shareholding in a business, it would usually be valued for the financial settlement.
For shared business interests, either of you can arrange a valuation.
Generally, if one of you owns it – outright or with others – they have to ask for the valuation.
The process might not be straightforward, especially if the business is privately owned.
Valuing a business might depend on:
• its assets – for example property or stock that it owns
• its earnings – the profit it’s expected to make in future
• the structure of the business – whether it’s a limited company, sole trader or partnership.

Valuing a business can be complicated and, as a result, can cost thousands of pounds. Before you arrange for an expert, it’s a good idea to get some legal advice.

StageRage · 23/05/2022 17:27

Do you need to live in a £1m house? If not in London and it is a modest terrace?

OnceUponAThread · 23/05/2022 17:28

@mocktail so I am assuming the business has been valued at £250k and can be offset / calculated accordingly.

If annual turnover is £250k that's a WHOLE different ball game because the valuation is likely to be far higher (if done on an income rather than cost approach). But again comes back to my questions around earnings etc.

Original poster
PaulaBawla · 23/05/2022 17:31

Apologies it was my first post so I’ll try and clarify some of the points

we are both in our mid 50s I have a small pension which he paid into until the business took off (about 120k and now pay in just about £1k a month)

He is working and earns about 50k a year I look after the business that we built up but take all the income from it the turnover is about 250k a year but only about 50% is profit, I only pay myself 12k a year though so surely that makes my income low and I’m not asking for maintenance. I just want to be able to live comfortably in the house and to be able to stop working if I want.

I have about £80k in savings and he has £10k

OP posts:
Original poster
PaulaBawla · 23/05/2022 17:32

Also sorry his pension will generate around 20k a year

OP posts:
FrownedUpon · 23/05/2022 17:33

What’s your pension?

I think you’re being unfair. His suggestion or 50/50 on everything seems fair to me.

Harridan1981 · 23/05/2022 17:34

I'm not sure you being able to give up work is a focal point here.

titchy · 23/05/2022 17:37

So the business makes £120k a year profit? Which is yours? And you claim to only earn £12k a year Confused Do you not think the judge has heard of taking dividends from your own company or something? I think you're taking the proverbial...

titchy · 23/05/2022 17:38

Why would you ask for maintenance when your husband only earns £50k and your kids are grown up?

Harridan1981 · 23/05/2022 17:39

She's not asking for maintenance. But I stand by not needing to give up work in your fifties with no dependent children.

Original poster
PaulaBawla · 23/05/2022 17:40

I’m not asking for maintenance that’s the point

But I want security in my old age and when I stop running/sell the business the income will stop and I will still have to run the house

so I think half of his pension will just about cover most outgoings

OP posts:
BritInUS1 · 23/05/2022 17:42

YABU

The business makes 50% profit so why are you only taking £12k? Does this mean that you leave the rest in the business?

Why should you keep the £1m house when no kids at home? X

TinyViolins · 23/05/2022 17:43

I'm still confused about the business- £125k profit pa but you only take £12k? Where's the rest going? You need to get a proper valuation.

Your proposal leaves your ex with £10k pa pension and a cottage, while you want £10k pension and the business and a million pound house.

Original poster
PaulaBawla · 23/05/2022 17:48

Yes I leave the money in the business or use tax efficient ways to get the money out of the company, but my salary as far as NIC is concerned is £12k

OP posts:
Soontobe60 · 23/05/2022 17:49

PaulaBawla · 23/05/2022 17:40

I’m not asking for maintenance that’s the point

But I want security in my old age and when I stop running/sell the business the income will stop and I will still have to run the house

so I think half of his pension will just about cover most outgoings

You have a pension yourself - that has to be factored into the calculations. You also have business profits of £120k a year and a house worth £1m.
I guess once his solicitor gets all the figures, you’re going to end up with far less than you want.
you’ve got at least another 10 working years before retirement, and a judge would expect you to carry on working rather than expecting your ex subsidise early retirement. You’d also be expected to sell the house. You can get a very nice house for 500K!

PatriciaHolm · 23/05/2022 17:49

The court could force you to sell, yes. You no longer have dependent children, so you have no need for a large family home.

Your proposal seems skewed in your favour and given no dependent children, a court may not look well on that. Your needs and his need to be weighed equally.

Given you say your solicitor is hesitant, i imagine they have already told you this.

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