An important way of partners saving to maintain a comfortable standard of living in their retirement. However pensions cannot be in joint names and it is often the case that one or other partner has a bigger pension at the time of separation. This does not take away from pensions being seen as an asset of the marriage or civil partnership to be taken into account in the financial settlement at the point of divorce or dissolution. It is important to know that pensions can only be shared where there is a legal relationship (divorce or civil partnership). People who live together can take pensions into account in their discussions by offsetting but can’t seek pension sharing or earmarking.
There are three main ways to deal with pensions when partners decide to end their marriage or civil partnership. The pension(s) can be shared, which means they are physically divided to provide a pension in each person’s name. An Attachment or Earmarking Order can be made so that a part of a pension is paid to an ex partner when the person with the pension retires. More commonly, especially where partners have similar or small pensions they come to an arrangement to offset the pension. What this means is that one person may retain all or more of the pension and the other gets more of another asset in exchange.
It is important not to overlook state pensions on separation, especially where one person has had caring responsibilities and many not have contributed fully. There is currently a top-up mechanism in place so that, without loss to the contributing partner, the other person’s contributions can be made up to the same level. State pensions are changing and this top up mechanism is likely to go or be replaced over the next few years so it’s important to find out where you stand.
Other things to think about when you are sorting out pensions are when pensions will be paid, whether a pension is already in payment, how to value the pension, what to do about benefits that can be paid to other people.
To access free, independent information and guidance on your pension options on separation visit the Pensions Advisory Service.
Mediation offers separating partners the opportunity to think through their pension options as part of financial settlement and to come to decisions that will work for you both. Your mediator will know what information you will need and the right time to seek advice.
National Family Mediation (NFM) is a network of professional family mediation providers based in England and Wales that work with families affected by relational breakdown. All providers aim to help clients achieve an outcome that works best for them and their family
National Family Mediation (NFM) services charge £25-£100 for a MIAM, depending on geographical locality, which may include the fee for the completed FM1 form. Meetings usually last for 45 minutes – 1 hour. This includes the means assessment to check whether you will be eligible for Legal Aid, determining whether your mediation will be free or not. Mediation sessions which follow the initial MIAM are charged at a sliding scale according to income, but start at around £80 per session, and usually last up to 1½ hours.
If you would like to get more information about mediation and/or make an appointment you can contact NFM direct on 0300 4000 636 or you can contact a NFM family mediation provider in your area.
All services also take referrals from Solicitors, the court or other helping / support agencies.