![]() ![]() They will inform you of the consequences so that you are able to make better informed decisions. ![]() ![]() However, this blueprint is not concrete and is subject to change – this is where the true value of an ongoing relationship with a financial planner is really clear.Ī financial planner will not only structure your finances and investments through the course of your divorce but also your new life, taking into account changes to inflation, interest rates and your personal circumstances. Under the guidance of a planner, you create a blueprint for your new life. A financial planner will recognise that the key to taking control of your financial future after a divorce is making the right decisions in light of a better understanding of your needs. With this system, divorcing people don’t get a clean break.įollowing on from your divorce, you’ll start a new life and it’s likely your finances will need to be restructured to reflect your new way of living. The court instructs the pension or scheme provider to make payments to the former husband, wife or civil partner. With pension attachment or earmarking, part or all of the benefits from a pension go to the ex-spouse when the pension pays out. ![]() Pension earmarking is available in Scotland but has been replaced by pension attachment in England, Wales and Northern Ireland. There are challenges with pension offsetting as it is not easy to split assets fairly and one party could end up with no pension on retirement. As an example, if one party has a substantial pension, pension offsetting could allow them to keep this while their former husband, wife or civil partner retains the marital home. With pension offsetting, the value of a pension is offset against other assets during divorce. A pension credit can then be transferred into a new or existing pension scheme. The amount awarded is called a pension credit and is stated as a percentage of the transfer value of the pension (although in Scotland it can also be stated as an amount). A pension sharing order provides a clean break. You are given a share of your former husband, wife or civil partner’s pension or vice versa and can decide what to do with it. Pension sharing ordersĪ pension sharing order will divide up any pensions between the couple who are divorcing. There are three main ways that pensions are dealt with on divorce: 1. This is an area where seeking good financial advice at an early stage makes sense. Importantly, it can also give you peace of mind at what could be an extremely uncertain period in your life.Ī pension can be one of the biggest financial assets that a person has, so it’s important to take them into account when agreeing on a divorce settlement. It is really powerful in helping you in the lead up to a divorce settlement and also afterwards in making the best decisions for your future. Cashflow modelling puts a monetary value on what you have now and what you may have in the future, which is then compared against what you are likely to spend over your lifetime to work out if there is a shortfall.Ĭashflow modelling takes into account your individual circumstances and can look at different scenarios to help you make the best choices, for example, whether or not it makes financial sense to stay in your former marital home or perhaps if pension offsetting is the best option for you. A common and understandable question when getting divorced is ‘will I have enough money in the future?’ It’s not an easy question to answer but a financial planner can help by using cashflow modelling to show what your life could look like financially. One of those first concerns is often ‘where will I live?’, which can be followed by ‘how will I live?’īy this stage, the longer-term implications of the split are starting to become a priority. Everything you’ve known for years or even decades has been turned upside down and your head is full of questions. Following a divorce, there is often a ‘ground rush’ moment. ![]()
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