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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.

Cash Equivalent value - crude calculation?

4 replies

HangerLaneGyratorySystem · 01/07/2025 10:37

Just had a conversation with a pensions adviser and they were saying the very rough rule of thumb you can apply when beginning to consider pension splits is to multiply the annual value of the pension by 20 - does anyone know if that's current value? (Would seem sensible rather than having to guesstimate the % increase each year) It's my ex-H's civil service pension so he does get a good "cost of living" increase each year, current value is £14k per annum and its in payment (he's 68). I'm only trying to do some calculations to give me an idea before the financial order.

OP posts:
Farside99 · 01/07/2025 11:22

As his pension is in payment given his age, I don't really have a clue how to value that unfortunately.

The 20 factor is what is used when calculating the 'value' of DB pensions for the life time allowance which doesn't correlate directly to their 'cash' value, which would be provided by the CETV if the pension wasn't in payment. Just for interest more than anything, I had to recently get a CETV for divorce on my pension and it was about 90% of what the annual value x 20 would be, so actually quite close, but 5 years ago when transfer values were significantly higher it would not have been a sensible approximation at all

LemonTT · 01/07/2025 13:46

I mean it is worth 14k per year. The pension share is a % of that. If you are trying to negotiate him giving you £7000x 20 cash equivalent, why would he. Most people don’t live to 88.

Farside99 · 01/07/2025 13:53

LemonTT · 01/07/2025 13:46

I mean it is worth 14k per year. The pension share is a % of that. If you are trying to negotiate him giving you £7000x 20 cash equivalent, why would he. Most people don’t live to 88.

Plus if he's getting full state pension, he's going to be paying tax on that whole £14k pretty much

UnemployedNotRetired · 01/07/2025 22:08

once a DB pension is in payment, it cannot be transferred (except in very rare cases, such as before normal retirement age or if you're an ex-spouse receiving a pension credit via divorce). So a CETV seems not needed. However, a quick calculation gave me £243,000. though I guess any ability to inherit as a spouse needs to be removed (!)

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