When going through divorce it’s important to keep a clear head when it comes to finances.  Divorcing couples have a number of financial claims against one another, including claims for income, lump sum, property adjustment Orders and also Pension Orders.

Often you may be worried about the family home yet a private pension can be worth much more.  Women particularly should be aware of any pension schemes; their own personal pension may be much smaller due to taking time out from work to raise children or work part-time.

All pension assets, including any pensions already being paid and benefits that have built up, should be taken into account when fairly dividing finances on divorce.   There are large hidden benefits within pension schemes and people are losing out during a divorce by not demanding a share of the ex-partner’s pension.  The legal division of a pension is dealt with using one of the two types of Pension Orders: Pension Sharing Orders and Pension Attachment Orders.

Pension Sharing Orders

Under normal circumstances Pension Sharing Orders are the best option.  In such cases, if, for instance, the wife is entitled to a share of her husband’s pension then that percentage of his pension is placed into a separate pension pot for the wife.  This means that the husband can continue paying into his pension in order to build it back up and the wife can do the same with her pension pot, which is not dependent upon the husband in any way.

Pension Attachment Orders

With a Pension Attachment Order, if the wife were to obtain a share of her husband’s pension then she will not receive that until he decides to draw his pension down.  Also, if the husband predeceases the wife then his pension dies with him and the Pension Attachment Order is no longer effective.

However, in certain circumstances, a Pension Attachment Order would be the best option.  For instance, if acting for a husband whose wife is much older and perhaps in poor health, then it would certainly be more beneficial, particularly if the pension was in payment, for there to be an Attachment Order because should the wife predecease the husband then the pension would revert back to him in its entirety.

It is therefore important, when looking at Pension Orders, to take advice legal on the best Order available for the circumstances of each case.

If you have any concerns as to Pension Sharing/Pension Attachment, then contact Clare Cherry in our family department for advice on your particular circumstances.