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Ask Clare Your Own Question

Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33275
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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, I'm currently going through a separation / divorce

Customer Question

Hello,
I'm currently going through a separation / divorce and i have a question about my personal pension.
I had a company pension before i was married which was frozen on 06/04/2001 when i left the company, i got married on 18/08/2001. Now, on 01/09/2003 i transferred this pension to a new stakeholder personal pension and the sum was £7,571 and the share price was £1.21 per share. The share price today is £2.84 which means this transferred pension is now worth £17,763 of my overall pension which is £60,000 in total.
So the question is this, Do i have to give my spouse:
- half of the £60,000 (equaling £30,000) ?
- or £60,000 - £17,763 = £42,237 and half that (equaling £21,118)?
- or £60,000 - £7,571 = £52,429 and half that (equaling £26,214)?
many thanks
Derrick
Submitted: 1 year ago.
Category: Law
Expert:  Clare replied 1 year ago.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
Did you live together prior to the marriage - if so for how long?
Clare
Customer: replied 1 year ago.

hi Clare,

yes we did, we first moved in together in 1996 and stayed living together to when we married in 2001.

thankyou

Derrick

Expert:  Clare replied 1 year ago.
Hi
When did you start paying into the pension?
Clare
Customer: replied 1 year ago.
Hi
It was 1997 I believe and it was frozen in 2001 before I transferred it in 2003.
Thanks
Derrick
Expert:  Clare replied 1 year ago.
Hi
What pension does your ex have, what other assets are there and what income do you each have?
Clare
Customer: replied 1 year ago.

hi clare

My exes pension is only £5000. Assetts are 2 homes, one with £70,000 equity and the buy to let with £18,000. My car at £2000 and her car at £5000 which she had a fresh loan out for.

I am not working at the moment and live alone with my 2 children 50% of the time. My ex has moved in with another man who earns around £25,000 a year i think and she isnt working.

many thanks

Derrick

Expert:  Clare replied 1 year ago.
Hi
Are you intending to offer a Pension sharing Order - or to "trade off' the Pension against some of the capital?
Clare
Customer: replied 1 year ago.

hi

not sure what a sharing order is ? but yes i was looking at trading off some of the pension as im very keen on keeping both of the property's.

thanks

Derrick

Expert:  Clare replied 1 year ago.
Hi
The first thing you need to know is that the Cash equivalent Transfer value of the Pension is not the same as the cash assets - so the figure will need to be discounted substantially.
Given that you were living together throughout the life of the pension and that the Transfer happened during the course of the marriage it is highly unlikely that if this went to court the Judge woudl apportion the pension as to that accrued pre and post 2001.
In addition in pension terms the amounts are relatively small and the costs of arguing of them would far outweigh the value
I would suggest that you work with the full figure - and use the point about the pre marriage contribution as part of the negotiation on the discounting process.
Offer £7,5000 extra capital - but think carefully about any offer up to £12,500
I hope that this is of assistance - please ask if you need further details
Clare
Customer: replied 1 year ago.
Hi Clare
Many thanks for you information and response.
I'm sorry but I don't fully understand this part ...
Offer £7,5000 extra capital - but think carefully about any offer up to £12,500
I hope that this is of assistance - please ask if you need further details
Clare
...could you just explain it to me please.
Also, what in your opinion would be the best way to retain both of the properties?
Many thanks
Derrick
Expert:  Clare replied 1 year ago.
Hi
If you are trying to give your ex extra capital instead of a pension share then you shoudl offer her an extra £7,500.
However if she asks for any figure up to £12,500 then you should consider settling on that basis
You will not be able to retain both properties unless you are able to raise sufficient capital to purchase her 50%
Clare
Customer: replied 1 year ago.

Hi Clare,

I'm getting a bit lost along the way here im afraid.

So with a £60,000 total pension pot are you saying i shouldnt give her £30,000 cash ? But give her only £7,500 instead ?

You may need to word it differently to me.

thanks

Derrick

Expert:  Clare replied 1 year ago.
Hi
A Pension is not an asset that can be turned into cash immediately - not like a car or a house.
If she had a pension sharing order then yes 50% of your pension would be transferred into a fund in her name - but that would not be money that she can spend.
So if you are going to give her cash instead you can claim a "discount" - hence the £7,500
Does that help?
Clare
Customer: replied 1 year ago.

Hi Clare

As i understand it you are saying i could EITHER give her 50% of the pension (£30,000 of pension money for a fund in her name) OR i could offer her £7500 in cash.

So £30,000 of pension money is roughly equivalent to £7,500 cash in these 'paying off' in these situations?

thanks

Derrick

Expert:  Clare replied 1 year ago.
Hi
Essentially yes - but the actual figure involved is negotiable - £7,500 to £12,500 is the range (roughly)
Clare

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