Partnerships needed to advise on pensions and divorce

Therefore, building and renewing professional partnerships is vital for advisers with clients splitting from their spouses, especially given the multiple recent changes to both pensions and divorce legislation.

Alistair McQueen, savings and retirement manager at Aviva, comments: "The legal community sadly refers to the first working day of the New Year as D-for-Divorce Day.

"It may appear mercenary, but advisers may choose to re-engage with their professional connections at this time, to remind them of the value that good financial advice can bring at times of divorce."

There are benefits to working closely with lawyers, other than to be front-of-mind when lawyers need specialist financial advice on pension sharing on divorce.

Linda Todd, head of operations for Bankhall, says: "Advisers with clients who have entitlements to their ex-spouses' pension via an earmarking order may also need expert legal advice regarding their rights under that order."

There are some exceptionally complicated matters involved with pension sharing on divorce where having a friendly lawyer working alongside the adviser is useful.

Without a detailed knowledge of the clients' personal financial and tax affairs, the lawyer could be creating more problems than they are solving.Martin Tilley

Janet Brown, partner at Sackers LLP, comments: "Pension sharing is a complicated area and early engagement with the pension scheme concerned is key. 

"Pension managers acting on behalf of the trustees are well placed to provide information on the scheme and to call in their advisers if a matter is particularly difficult.

"As pension sharing orders must be expressed as a percentage (in England and Wales, the position differs in Scotland), a greater understanding between all the advisers working on behalf of the member or spouse about what that actually means.

"If an order is made against a pensioner in payment in an occupational pension scheme, getting the paperwork in as soon as possible so the scheme can implement it will minimise the time the pensioner may be overpaid and the scheme will need to collect back in that overpayment."

Pensions lawyer Robin Ellison, head of strategic developments for Pinsent Masons, says it is vital for both parties in a divorce get independent pension valuations, which can be obtained by the lawyer or the financial adviser.

He comments: "I believe most parties would benefit from an independent valuation, with a menu of options so the judges and parties would be better informed before coming to a decision.

"There are approximately five or six specialist firms who produce reports - although not that many in terms understandable to a judge."