Pension sharing, does it have to stay as pension?

[Browniesandcustard]

Just wondering if anyone can help with this as I’m going round in circles. If we do a pension sharing order, does that money have to go into a pension fund or can it be used towards a house deposit? Thank you!

I don't think so, unless you're an age where a lump sum can be taken. The alternative is to forfeit the pension and take a chunk of savings instead, but don't underestimate how useful having a pension will be going forward.

Pension, it'll go one from one provider to your chosen one, can't be withdrawn.

Thank you - appreciate the replies.

If you’re currently aged 55 you can take 25 percent tax free cash and income. The pension has to stay in the pension wrapper. 75 percent is taxable. If you earn other incomes and go over the tax allowance.

Pp correct. It can’t be taken as cash other than the ( current) 25/% up to 250k I think, if over 55. Expect these will change in oct budget.

don’t transfer to a pension in your name

You can ask to offset pension against cash if the other person has access to funds. Cash isn’t equal value to pension though. You’d need a pensions actuary to report on the likely equivalent.

If it’s a Teachers Pension or similar, you will become a member of the Teachers Pension scheme and a part is moved to your ‘pot’. If it’s a standard type of pension, your share will be moved to a pension scheme in your name and you would have to set one up if you haven’t got one already.

I traded some property to keep my pension with my ex-husband. He was being extremely difficult and despite pension values etc this was the only way to avoid an even more court cases (I'd already spent £50k on solicitors fees!). So you could ask him for cash instead of pension if he has it.

If you choose cash over pension remember that the value of the pension share is not the current cash amount- it’s the value of the income stream over many years which that cash amount will generate.
ie £25,000 of pension is worth more over the years than £25,000 in cash.

this guide is good;

www.judiciary.uk/wp-content/uploads/2023/06/1.-Sorting-Out-Finances-on-Divorce-2024.final-for-publication.pdf

Thank you so much - I’m about to turn 50 so will have to wait until I’m 57 to draw anything down.
Really appreciate the replies as I am useless with money. Thank you.