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Guide to Pensions and Divorce



    Whether the pension is offset (balancing the pension rights against other income), earmarked (arranged so that when one person’s pension comes into payment part of it will be paid to the other person), or shared (split at the time of the divorce), it is vital that a decision is made by the couple rather than risk the court taking the choice out of their hands.

    Deciding what happens to the splitting pair’s pension is as important as carving up the former marital home.

    This guide will look at the various options for carving up pensions on divorce, what impact these actions have on the retirement savings pots of a divorcing couple, and the tax implications.

    Contributors to this guide include Ian Naismith, pensions expert at Scottish Widows; Hannah Foxley, Chartered financial planner at The Women’s Wealth Expert; Clare Moffat, technical manager of Prudential; and Ray Chinn, head of pensions and investments for LV.

    In this guide


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. What is the relevant pension value when deciding a divorce settlement, according to Mr Naismith?

    2. With pension sharing is it possible to share lump sum death benefits, according to Ms Foxley?

    3. Before the Pensions Act 1995, which method was the only way in which pension assets could be dealt with in divorce?

    4. According to Scottish Widows, how many divorced women could remember discussing pensions as part of their divorce settlement?

    5. Pension sharing benefits will not be affected by death or remarriage of either party. True or false?

    6. What happens if a pension sharing order reduces the value of a pension pot with primary protection below the lifetime allowance, according to Ms Foxley?

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