When navigating a financial settlement during a divorce, pensions are often one of the most valuable things on the table. However, they are sometimes overshadowed by the focus on the home and financial needs of both parties and their children. It is important to address both the short-term and long-term financial needs of each party as this is crucial for a fair outcome.
Understanding Pension Values
One of the first steps in dealing with pensions during a divorce is understanding their value, which is why solicitors ask both parties to disclose the Cash Equivalent Transfer Value (CEV or CETV). However, these figures rarely provide enough insight to determine whether or how pensions should be divided through a process called ‘pension sharing.’
When is a Pension Sharing Report Needed?
In some cases, the CETV doesn’t reflect the actual value of the pension. In these situations, a pension sharing report may be necessary. This report can help inform how the pension assets should be shared to either equalise the CETV or ensure a fair income for retirement.
Other situations where a pension report may be needed include:
- Age gaps between parties, where equalising retirement income is a goal
- One party has serious medical or health concerns
- Pensions have been accrued before the relationship or marriage
When is a Pension Report Not Required?
In some cases, a pension report may not be necessary, such as:
- When pension values are modest in comparison to other assets
- When the parties are younger (in their 20s or 30s) and have had a relatively short marriage
How DMA Law can help:
Every divorce case is unique to the couple, and there’s no ‘one-size-fits-all’ approach to dividing pensions. If pensions are involved, it’s essential to seek early legal advice to ensure you make the right informed decision.
At DMA Law, our experienced family law team are here to help. We provide tailored advice and can help you in achieve a fair financial settlement during this difficult time.
