In yesterday’s budget, the government have announced changes to pensions, the first being the annual allowance (the most you can save into your pension pot in any tax year) has increased from £40,000 to £60,000. As well as this, the lifetime allowance has been scrapped. The lifetime allowance is the amount you can save into a pension pot before further tax consequences arise.
It is often the case during divorce, dissolution or annulment proceedings that you will also look to resolve your financial matters. In these circumstances, pensions crop up as an issue. There are different ways in which the Court will consider sharing pensions, sometimes they can ‘off-set’ your pension value against other assets, for example a property or investments, this can be particularly important if one party values a property greater than a pension or vice versa. There is also the option to make a pension attachment order ‘earmarking’ which allows a spouse to receive funds in the future either by way of a lump sum or income and the benefits are ‘earmarked’. Finally, the Court can make a pension sharing order which splits the pension benefits at the time of the divorce, with one spouse the ‘transferor’ transferring pension credits to the other spouse, the ‘transferee’ who will receive the benefits into their own pension pot, either in the same scheme or they can set up a new pension.
Pensions form an important part of the matrimonial assets and should be considered carefully, it is very important to take independent advice from professional divorce solicitors on your pension and matrimonial assets.
At Crisp and Co our divorce solicitors work with specialised actuaries and pension advisors and are able to guide you through your financial settlement. If you would like to book in a free initial appointment please click here.