Preparing for a new future

Divorce amongst older couples is on the rise in the UK, and it is these older divorcées who could find themselves at a bigger financial disadvantage than their younger counterparts.

A combination of factors – including lower earnings and taking time out of the workplace to raise children – has meant that women often tend to have smaller pension funds than their husbands. Therefore, if you should decide to divorce, any pensions need to be incorporated into the marital assets. If either spouse has taken time out of work to support children or the home, and has therefore missed out on pension savings while the other has built up a decent amount, there should be compensation to reflect the sacrifices that have been made.

Some spouses opt to offset their pension rights against the value of other assets, perhaps taking a one-off lump sum and making a clean break. Alternatively, they may decide to earmark some of the pension of their ex-spouse, deferring that sharing arrangement until the retirement of the main pension holder. The more practical option now, however, is that couples can physically split pension rights at the time of divorce but keep their individual shares invested. This allows both parties to move on with their lives, with their pension rights in hand and with full control over them.

If you are getting divorced, call Crown Wealth Management to discuss the various pension options in more detail.

Note: if you should decide to divorce, we recommend that you always take expert legal advice before making any decisions.