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Pension Sharing After Divorce:
What to do next

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Pensions and divorce are both tricky, complicated subjects. The end of a relationship is not a convenient time for technical discussions of your pension, and divorce proceedings make everything more complicated. 

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In what can be a difficult time following a Divorce, having the right help and support can make such a difference. It can be disconcerting not knowing where to go or who to speak to about your Pension Sharing Order. 

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What is a Pension Sharing Order?

A pension sharing order is a court order used to separate two people’s pension assets. They are primarily used in the context of divorce, but also when a civil partnership is dissolved.

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Pension sharing is important, as retirement savings are often at least as valuable as other marital assets such as a house or maisonette.. Plus a lot of people depend on their spouse to support them throughout their life.

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So without a pension sharing settlement, these people would be left almost entirely without retirement benefits. Pension share legislation was introduced in December 2000 to ensure provision to people in these circumstances.

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A pension sharing order may sound severe. But though it is technically a court order, it is a necessary part of even many amicable divorces. This is because unlike with some assets such as the family home, you and your spouse cannot simply make an agreement between the two of you. Pension schemes require a court order to make the necessary changes.

Implementing Pension Sharing Orders After Divorce

Pension Sharing is where an existing pension is physically split and divided as part of a divorce settlement.

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The amount is always set out as a percentage of the pension's cash equivalent value.

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As a result of this the ex spouse gets a pension in their own name and under their control.

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When a Pension Sharing Order is granted the pension fund will indicate if the spouse who did not accrue the pension may keep their share within the fund or whether an external transfer is required.

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An external transfer is where the pension proceeds awarded to the ex spouse have to be transferred out and invested into a separate pension scheme of their choice.

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This is often the case. As an Independent Financial Adviser David will guide you though this process to ensure your new pension is set up correctly based on your needs and circumstances.

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He will also clearly explain the cost associated with doing this and what is involved so you have a clear understanding of what it is that you are doing.

The Process Step by Step

In what can be a difficult time following a Divorce, having the right help and support can make such a difference.

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It can be disconcerting not knowing where to go or who to speak to about your Pension Sharing Order. 

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David will go out of his way to put your mind at rest and make you feel comfortable about the whole process. If you have an email address he can send you a simple video call link so you can speak face to face, otherwise you can discuss things over the telephone or dependent on locality, face to face.

 

 

 

 

 

 

 

 

 

 

 

 

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Regarding the process itself here is a summary of what is involved :

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  • An initial discussion between David and yourself to talk through your situation and establish what needs to be done. 

  • David will need a copy of your Pension Sharing Order and a signed letter of authority from the original pension holder allowing him to obtain all the information on the pension in question. (He will provide you with the letter of authority).

  • David will then confirm with the pension provider if a transfer out is required rather than being able to retain the pension in it's existing fund.

  • If this is the case, David will go through a full fact find with you so he has a good enough picture of your circumstances to be sure the correct advice regarding transferring out is provided.

  • David will complete a risk profile questionnaire with you to ensure his recommendations are in line with your attitude to risk and where you are comfortable.

  • The research will then be carried out and your Suitability Report will be produced together with all the other documentation related to your case including the necessary application forms.

  • This will be posted to you and David will then go through this either by video call, face to face or telephone to ensure you are happy with the recommendations, and the advice that is being given.

  • When you are happy with everything, David will complete the applications forms with you and then post them out to sign.

  • He will also go through any other requirements to go with the application such as ID and Address verification for Money Laundering Purposes.

  • Once we have received the paperwork back it is sent to the chosen pension provider who will set up your new pension and organise the transfer of funds.

  • When everything has been finalised you will receive your paperwork confirming your new pension has been set up including your new account number and other details relating to your pension.

Costs of Advice and Pension Implementation.

There is no cost to have an initial chat and David will be happy to spend as long as you need to discuss your circumstances.

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However, if you wish David to act for you there are costs associated with taking Independent Financial Advice. They are designed to be clear and transparent so you know exactly what the costs will be, and David will cover these in the initial discussion he has with you.

 

With pension sharing orders the cost of setting up your new pension is calculated as a percentage of the total value of funds transferred into your new arrangement. This is paid from the funds once they have been transferred into your new pension, or you can choose to pay this separately if you so wish.

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This covers everything including all advice and recommendations made and the actual physical process itself of setting up your new pension for you.

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As well as discussing this with you, David will provide you with his Regulatory Client Agreement which will confirm all costs associated with what you are doing along with other important regulatory information.

Request a FREE Call Back

David Yates

Independent Financial Advisor

Tel: 07540702030

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