How pension sharing works
Pension sharing is the process of splitting a pension during divorce proceedings. It is a percentage based process wherein both parties receive a separate pension in the future. The percentage of pension shared for each respective spouse can differ depending on the value of the pension and any other financial assets involved, or depending upon the ongoing divorce proceedings. If one party subsequently dies or remarries post divorce, this event will not affect the continued pension benefits of the other party.
In order to arrange this sharing of a pension, you must apply to the court to receive a pension sharing order. This order will award one party a percentage of the value of the other party’s pension rights. At Pinnington Law, our team of solicitors are happy to explain this process of arranging a pension sharing order to you in greater detail, and can help you to complete the official forms required to validate the order.
When applying for a pension sharing order, you must decide upon the type of pension share in which you wish to participate following divorce proceedings. The two main types of pension share are as follows:
Internal share : This circumstance refers to when the wife receives a pension share within the same pension scheme as the husband . In this case, the pension benefits which the wife receives will be independent to those of the husband. Usually, these pension benefits begin to be paid to the wife when she reaches the retirement age of the husband’s specific pension scheme. Internal shares are predominantly used in the event of unfunded public sector pension schemes.
External share: This circumstance refers to when the wife receives a pension share which is external to the pension scheme of the husband. In this case, the wife must invest this pension share into an alternate pension arrangement of her choosing. For instance, the wife may choose to invest this share into a personal pension or occupational scheme which is able to take receipt of the pension credit. External shares are predominantly used in the event of funded private sector schemes.
At Pinnington Law, we currently employ a highly skilled team of solicitors who are experienced in arranging various types of pension sharing schemes. Subsequently, if you have any further questions regarding Pension Sharing or Alternative Financial Settlements, feel free to contact us today to book your initial free consultation wherein we can resolve any issues you may have.