Divorced women missing out on pension claims
According to the Age UK Charity, thousands of divorced women are being left worse off in retirement because they are not made aware of their legal entitlement to their husband's private pension as part of the divorce process.
It has been possible since the 1st December 2000, under the Welfare Reform and Pension Act 1999, that a couple on divorce or nullity of marriage are allowed the option of pension sharing. Only the Court can actually make a pension sharing order against the member's pension rights in a pension arrangement. These provisions were extended to include civil partners in 2005.
The effect of a pension sharing order is that a percentage of what is known as the Transfer Value of the members pension will create a pension debit against the retirement benefits of the scheme member and the former spouse will receive a pension credit of the same value. The pension credit can be used in an internal transfer in the existing scheme, if this is permitted, and creates a separate pension arrangement in the name of the former spouse. Alternatively an external transfer will allow the pension credits to be moved to a separate pension arrangement with a different provider as chosen by the former spouse.
Age UK is calling for the government to change the law so private pension must be considered as part of the divorce process and wherever possible, divided fairer between the spouses.
At PCB Solicitors, private pension provisions are always considered when advising separating spouses so as to ensure, as far as possible, that there is equality and fairness when dividing the matrimonial assets and that one spouse is not missing out on substantial sums without realising.
If you would like to discuss divorce or finalising financial arrangements at the end of a relationship, please contact Ruth Harris.
If you have any enquires about this article then contact our Shrewsbury office on 01743 248148.
PCB Solicitors LLP is a modern partnership, with offices in Shrewsbury, Church Stretton, Craven Arms, Knighton, Ludlow, Telford, and Clun (by appointment only).