Worried about divorce and financial arrangements

[BrassFrenchie]

Help!

my husband has left me without much of a reason. We’re about to start mediation and divorce process, but I can’t sleep at night for worrying about how I’ll cope in the future.

he was the main earner (teacher earning £53k) while I’m an admin assistant earning £25k, however I’ve only earned £18k for the last 6 years but have just bagged a promotion).

we’ve got around £150k equity in the house and a £32k mortgage.

He said he’ll walk away from the house and leave me with it - I don’t think I could afford to buy him out. But family keep telling me that I’ll regret accepting the house and not asking for a share of his pension instead.

Hes been teaching for 15/16 years. Anyone in a similar situation that might know what his pension (or CETV) is worth?

I am so sorry. May be he will reconcile. I assume as you have a 3 year old you might have been wanting a second child soon and it would have been simpler to have it with him although I am sure that is a minor issue now.......

His net pay will be £3400 a month assuming no student loan deduction but after pension contribution may be 3000? I am guessing. Yours will be 1793 (assuming no student loan and no pension contribution. So he gets almost double but not quite. You only get just over what is the new minimum wage of 23,400 or whatever it is going to be, on 25k. If you live in the house with the one child it is possible you might get universal credit top up (check) and you might well get child benefit which the family may not currently get if the child will live with you (don't assume mothers always have the child).

50% in England is only a starting point. To house the child it may be you need more than 50%. My husband who earned less got 59% in return for not claiming maintenance from me and provided I paid 100% for our children (I am the higher earner). CMS child support you can work out online. You might or might not get spousal maintenance unless you go for a clean break.
Don't rush anything. Do pay £3 for a land registry search of the house to check exactly whose names it is in and if it shows a mortgage to see if he has secretly done anything with the house.

Make a new will this week so your assets are left to your child with your parents or sibling as trustee. The husband will have the child if you die but you may want to add guardians in the will in case both of you die. If either of you has life insurance or pension from work you are likely to have put it in trust for the spouse which again you might want to change - to cover death, but in fact you probably want him to keep it in trust for you at least for now.

Gather all the data you can = marriage cert, pension details, bank account details for both of you.
A pension is not cash as is said above. You need to look separately at the house equity and also the pension. You could get a pension sharing order for when you are both pension age. In mym own case we decided my husband's teacher pension given we had at least 20 years to retirement (we are now both still working full time in our 60s now) and my SIPP pension were worth about the same so we chose not to divide them. I could afford to buy my husband out of our house and he could not so I stayed here with the children and a massive mortgage.

If you’re struggling to see a lawyer, I’d go and see a financial adviser instead to see which options would be best just now. (A lawyer would advise you on what sort of split is more likeky btw rather than how to do the split)

Depending on your ex pension value as well as the mortgage you have, you might not need to ‘buy him out’ to keep the house. If the mortgage repayments are low enough, you could stay where you are (which might or might not be what you want btw).
Or you might be better having half of the house and of his pension in the long term. Esp if you haven’t really built a pension pot fur yourself (you’re not mentioning that).

I think both options are worth investigating. Keeping the house will probably be better short term (I suspect you’ll struggle to get a mortgage just now on your income). Having some of his pension might be better LT when you reach retirement age.

First step though is knowing what’s his pension worth (and yours)

You could waste time and effort (and possibly getting his back up enough to retract his offer) trying to find out his pension worth but honestly could you afford to put a roof over your head right now with half the house equity? Do you want something solid that will increase in value over the years or do you want to have an unstable home and wait for something that might not be worth what you thought it was? Governments are definitely eyeing up these public sector pensions as unsustainable/worthy of raiding.

I went with higher share of house as I wanted stability right now otherwise I would have ended up in rental at the mercy of private landlords. Peace of mind tends to be undervalued in divorces.

@millymollymoomoo yes, I have a small pension given that I only earn a low income. It’s a Local Government Pension Scheme. I took a year out due to having Stage 3 Breast Cancer and went back part time (4 days) following this as we tried for our ‘little miracle’. My pension will be negligible compared to his due to the huge different in employer contributions for support staff v teaching staff

@MyNewLife2025 thank yo. The remaining mortgage is only £32k with 12 years left on the term at the moment - we paid a lot off with an insurance payout when I was diagnosed with stage 3 breast cancer when I was only 26. I have a small pension given that I only earn a low income. It’s a Local Government Pension Scheme. I took a year out due to having Stage 3 Breast Cancer and went back part time (4 days) following this as we tried for our ‘little miracle’. My pension will be negligible compared to his due to the huge different in employer contributions for support staff v teaching staff

Earlier salaries will have been revalued in line with inflation in the mix.

Anyway some very ballpark calculations below.

If TPS was still an 80ths scheme and final salary, then so far his likely pension is 16/80*53000 or 10,600. CETVs tend to be 20-30 times that amount, so easily above £200,000. So, much will depend on how much of the pension is under the older final salary scheme rather than the newer career average scheme. IF he joined before 2007 (probably not?) it would be higher as the normal pension age was then 60 rather than 65.

This calculator Cash Equivalent Transfer Value Calculator (CETV) - UK Pension Help actually converts £10,600 at age 65 to a likely CETV range of £222,600 to £349,800. But that £10,600 may be a little too high given recent TPS changes.

Assuming salary of £40,000 in real terms and total contributions being about 30% of that (TPS is actually higher than that now, employer 28.7% and employee varying but about 10%, but was lower before) would mean £40,0000.316 or £192,000 -- the amount that would have been paid in had it been a DC scheme.

This is probably why he is saying you can have all the equity, because you being unwell is what has paid the majority of the mortgage. An initial consultation with a solicitor is worth spending some money on. Both pensions would need to be looked at. I think the danger is that if you go for his pension, he’ll decide that he does want equity from the house after all. What would it mean for you if he was granted say 40% of that , or even 50%? He isn’t a high earner so may be awarded more than you think, if it comes to throwing everything into the ‘pot’. You need to have all the financial information so you can make an informed decision.

So I see why he is suggesting this given that it was your critical/ill health insurance which paid for a chunk of the equity and thinks it's fair to "give it back to you"

However I wonder if an argument can be made that you should get both the equity and a pension share. As the insurance is there to make up for the loss of earnings and so on.

the CETV was available from my public sector pension provider within a few weeks. xH had CETV statement as an instant constant option on his SIPP App and same on my private pension App. You need that info, and all of your asset info, to decide best way forward.

Your pension pot may or may not be tiny but it still needs to be declared in the asset division.

How much is the equity now worth in the jointly owned marital home? Biting his hand off to get the house in lieu of his pension pot may be a very good deal for you.

What a silly post. The CETV is his 'pension pot'. How do you think he works out his possible maximum tax free 25% if he doesn't have a pension pot figure? Your £8k estimate is ludicrous.

@ByQuaintAzureWasp that's really unfair.

It's not a pot in the sense of a DC pension, it's different.

Surely the £8k figure is per year in retirement, what's already been earned? Why's that ludicrous?

But you've got 30 + years to build your pension.
If he's offering you the house I'd take it.
He's got more buying power than you.

@BrassFrenchie Hi, his teacher pension is likely to have more than £150k in it. I've been teaching a little less than your husband and there's £125k in mine. That also includes time out for mat leave and a small reduction in hours. I've also had minimal/short term promotions. But I'm not sure if it all counts if he acquired some before you were married. Ask for his CETV. He will need to apply to the teachers pensions and it can take up to 3 months.

Getting professional advice is always a good idea (financial advisor/solicitor). However, a secure home with a tiny mortgage in which to raise your little daughter is a huge thing. If you decided to split the house and pension would you end up renting? Because that sounds both expensive and insecure. I think it’s more than reasonable for him to ‘give’ you the £150k equity if your illness is the reason most of the mortgage is paid ioff, but all the same, it’s a great asset. You are still young with time to build up a career and pension of your own and hopefully the house will also gain value. I’m very sorry you had cancer so young and happy you were still able to have a child. I wish you very good health and the best of luck with your new life.

The pension CETV could be extremely difficult to get hold of right now due to the McCloud judgement (Google it). I’ve waited 14 months and still waiting for my ex’s updated Teachers Pension CETV…

Before this, in 2022, we did get a CETV which was around £120k. We had a pensions expert value this in terms of cash for offsetting against other assets and he came up with £72k median value based on this old CETV. This had been built up over about 10 years and due to McCloud it’s possible that this figure is wildly out, as it needs to be recalculated with new parameters.

So, if you are being offered 100% of the equity, ie a £75k cash sum I think on the balance of things (the time to get a CETV and additional time and cost to get an actuary report) you might want to consider just settling for this. His pot would likely have to be more than double my ex’s pot for it to be worth arguing over. In the future once your child has left home, you might downsize and invest the difference in a pension.

This is just my perspective based on own circumstances. You should definitely get legal advice and make sure you don’t forget about any potential assets.

If I were you, I would contact Universal Credit ASAP. They can backdate any funds to the date you submitted your claim.

I’d be careful about this. The funds were invested in the family home and therefore legally became part of the marital assets. It’s unlikely op would get the entire house and a large chunk of his pension, in fact if she is seen to negotiate unreasonably she could get a lot less than what she is currently being offered.

@Mumof3confused I’m definitely not out for both. I’m definitely not out to leave him high and dry either. I really just want either the house/or a 50% split but I was just curious to see what my option were - it’s quite scary earning minimum wage and all of a sudden being left to work out how to make it stretch, so I really just want to make sure I can manage for the sake of our daughter

In your case, I would take the house for security. You have time to build up a pension but do prioritise it.

I have been teaching for the last 14 years, my salary in August 24 was @ £49,000 per year, but have spent the past 6 years pro rata on 3 days per week. I retired in August and have a monthly pension of £850 pm, and a lump sum of around £27000. Obvs I have been part time but it might give you a ballpark idea

Given your previous cancer diagnosis I would absolutely prioritise keeping the house, you need the security.

I second and third all the comments about the pension. Especially if it's defined benefit. They can be really valuable but a lot of people don't understand the maths so it's easy to have the wool pulled over your eyes.

The £8K is the annual value of his pension, not the total value!

we’ve got around £150k equity in the house and a £32k mortgage.

Just checking is this a home value of £182K? So actually £150k equity or £150k home value minus the mortgage so 118K. All house equity and none of his pension doesn't look exactly fair on the face of it. I'd think house plus some pension. Personally I'm happy to take more equity for less pension to keep our house, but everyone's circumstances are different.