Divorcees could be left without a pension following April’s reforms, Debbie Kay of Thomas Miller Wealth Management has warned.
In some cases pensions can form part of the divorce settlement through a pensions earmarking order, which provides the ex-spouse with a fixed percentage of the pension income in retirement.
But since last month, the member of the pension scheme no longer needs to take their pension as an income and can take it all out as a lump sum instead. This could lead to a legal wrangle over splitting the lump sum, with existing rules unclear on how this should work.
Ms Kay, a private client partner at the London firm, said: “With all the new pensions legislation introduced in April the issues of pensions and divorce has become more complicated.
“Any divorcee in this situation should definitely check that any earmarking order would equally apply to a capital sum as well as pension income.”
Earmarking is one of the ways pensions are shared during a divorce, with sharing – transferring savings into a pension under their own name – being another.
Andrea Boutcher, family law expert with Wiltshire-based Inspire Family Solicitors and Mediators, said: “Earmarking orders have not been the major choice since pension sharing orders became available in December 2000.
“However, it is possible that the reforms could impact on some people.
“Anyone with an earmarking order that is still in force should consider their position.
“I would recommend that they seek advice from a solicitor or accredited pension specialist to ensure that their provision is protected.”