Divorce affects many people at some point in life and, as well as the emotional upheaval it causes, it can leave people - of both sexes - financially vulnerable at what is already a very difficult time.
A financial adviser will work in partnership with you to help:
- set realistic financial goals and a plan for the future
- understand your options for using your pension
- build up your retirement savings after divorce
- review your existing pensions and investments to make sure they are achieving the maximum growth possible
- update your Will
In divorce, pensions can be the biggest asset after the family home
Pensions can be split in different ways, so it’s important to understand the options available to you.
With an in-depth knowledge of pension rules and access to the numerous types of pension schemes, Flying Colours are adept at assessing the right place to invest your pension sharing order, pensions attachment or earmarking order.
What is a pension sharing order?
A pension sharing order is one of the options available in divorce/dissolution of a civil partnership or Marriage. It provides a clean break between parties, once your marital assets have been assessed, the court will award a percentage of one party’s pension value to the other party, which is then used to set up a separate pension.
The courts confirm this via a pension sharing order document.
Does it apply to my state pension - can we split the basic state pension in divorce?
No, but you could claim the basic state pension using your former partner's state record. However, getting remarried negates this option.
Both you and your ex must be over the state pension age before you can claim (given you have not remarried).
Am I restricted by provider? Or can I place my share with another pension provider?
In most cases, you will have the option to transfer out of the scheme and place it with any provider. In some instances, schemes may have restrictions where you are unable to transfer out, and it must remain with them.
What other areas need to be addressed in divorce?
- Updating your Will
If the divorce is less than amicable, your Will may need to be updated to ensure the ex-spouse is no longer a beneficiary of your estate. There could also be the need to amend your will to show the new beneficiaries.
- Updating or renewing your life insurance
The existing life insurance plans should be reviewed as you may need to set up new plans to reflect any changes. For example, in some cases it may be necessary to ensure that the ex-spouse will no longer receive the proceeds of the policy.
- Investing the proceeds from your divorce
Proceeds should be invested according to objectives, attitude to risk, retirement planning etc. A full holistic aspect should be approached with an adviser.
Is there likely to be an impact on my retirement age and income? How will they be affected?
Plans and funds previously accumulated on a joint basis are now split, therefore, planning for retirement is vital to re-evaluate and to ensure a solid plan is in place.
For further information on how Flying Colours can help you or a loved one in divorce, get in touch with us on 0333 241 9900 or drop us a note here and we'll call you back at a time that's convenient.