The Pension and Lifetime Savings Association (PSLA) has provided updated guidance to support private sector occupational pension schemes when providing information on pension sharing for divorcing couples highlighting, amongst other issues, the new charges for Pension Sharing Orders (PSO).
The Pensions and Lifetime Savings Association (formerly the National Association of Pension Funds) is a trade association for those involved in designing, operating, advising and investing in all aspects of workplace pensions. The updated guidance was launched on the 2nd January 2024 and is detailed, but the PSLA have been careful to say the guidance is meant to be taken as just that, guidance and the information provided and charges may vary depending on the circumstances of a case.
The Pension Advisory Group (PAG) has also recently issued a new edition of its guide to the treatment of pensions on divorce
The guide brings together its members’ expertise in the fields of divorce, financial remedies and pensions and was originally designed for professionals, however, as it covers the stages a couple would have to go through to ensure a pension is split fairly during a divorce – from information gathering and disclosure to securing a pension sharing or pension attachment order = it could prove to be a useful companion to the PSLA’s updated guidance.
Pensions can be a significant asset to be considered within a final settlement and a ccess to a pension pot could be crucial to ensuring both parties have future financial security, particularly when one spouse has been the major earner during the marriage, meaning the other was unable to build up any meaningful pension savings. The PLSA’s Deputy Director, Joe Dabrowski,, explains:
“Understandably, working out how to split pension assets is not the first priority for most separating couples. But it is really important to make sure both parties are provided for in retirement, especially when one party has been the primary earner and built up a pension, while the other – usually because they have taken on more family caring responsibilities – has not.”
Pension sharing is still overlooked by a staggering 71% of divorcing couples. This is even in circumstances where the pension(s) are the most valuable asset.
The new guidance underlines, that in most cases, it is still the wife who is most likely to miss out on wealth they should be entitled to. At the launch Mr Dabrowski commented:
“It most cases, it is women who have less pension wealth. On average, women retire with about two thirds of the pension savings of men. Pension sharing is designed to help address this imbalance when couples decide to go their separate ways. Our Pension Sharing on Divorce Guidance is one of our most downloaded tools and an important resource to help carry out Pension Sharing Orders fairly and consistently.”
It is a essential to consider and address the pensions held by each person when looking at the financial arrangements on divorce and important to seek early legal advice so that you know what your options are.
If you would like to discuss any aspect of a divorce or separation – including pension sharing – in total confidence today, please contact us to arrange an initial call with one of our highly experienced family law specialists.