When people think about divorce, they often focus on the family home, savings, or child arrangements. Pensions are sometimes forgotten, but they can be one of the most valuable assets in a marriage. Understanding pensions during divorce is very important for your future financial security.
Why pensions are important in divorce
A pension is not just money for later life. It can be worth as much as, or even more than, a house. Even if only one person paid into a pension, it is usually still considered a shared marital asset if it was built up during the marriage.
Ignoring pensions can lead to unfair outcomes. One person may keep the house, while the other keeps the pension, without realising the true value of each. This can cause serious money problems later in life, especially at retirement.
Types of pensions that may be included
There are different types of pensions that can be considered during divorce, including:
- Workplace pensions
- Private pensions
- Self-employed or personal pensions
- Public sector pensions, such as NHS or teacher pensions
- Each type is valued differently, and some are more complex than others.
How pensions can be divided
There are three main ways pensions are dealt with in divorce:
- Pension sharing
This is often the fairest option. A percentage of one person’s pension is transferred into the other person’s pension in their own name. - Pension offsetting
One person keeps the pension, while the other receives a larger share of other assets, such as the family home. - Pension attachment (less common)
One person receives payments from the other’s pension when it is paid out. This option has risks and is used less often.
Why expert advice matters
Pension rules can be complicated. The value on a statement may not show the real long-term worth. A family law solicitor Manchester can help you understand what the pension is truly worth and how it fits into the full financial settlement.
A family lawyer in Manchester can also work with pension experts if needed, making sure any agreement is fair and legally correct. This helps protect both people and reduces the risk of problems in the future.
Final thoughts
Pensions play a big role in life after divorce. Making the right decisions now can protect your income later on. Taking proper legal advice ensures pensions are not overlooked and that your financial future is secure.