Final salary pension sharing

Hi
I'm just starting proceedings with a DIY divorce and solicitor for financial statement.

Long marriage and 2 children at uni.

My question is how best to deal with pensions. Between maternity leave and working part time as the main carer, we have a large difference in pension provision.

How would pension sharing work on a final salary pension? The ETV is quite low given the estimated annual pension.

If we used offsetting, he wouldn't end up with much money from our house sale.

Anyone else going through this issue?

Welcome to Wikivorce.

It is a good idea to see if you can reach a settlement between you rather than spending a lot of money on having solicitors negotiating for you. You should get legal advice on any proposal you put together and should make any decisions on the basis of full financial disclosure.

After a long marriage the start point for division of all assets is 50:50 but this isn't necessarily how it ends up. The final settlement depends on a range of factors including ages, incomes, children etc. The first consideration is need for housing and income now and in the future.
Contributions are counted as equal and there is consideration of diminished earning capacity as a result of childcare responsibilities.

The housing needs for each of you and any children under 18/21 should be looked at first. If there is a disparity in incomes, it would be reasonable for there to be an unequal split of equity. You need to take your respective mortgage capacities into account as well as the equity and purchase price of a suitable property.

There are also mechanisms for a share of equity to remain tied up in the house until a later sale when the children are older.

As you have worked out, the transfer value of a final salary pension does not necessarily reflect the true value of the benefits it provides. You can do a rough calculation to work out the relative values of the pensions you have ie how much annual income every £100 of pension will provide. Or you can see if you can get an equivalent annuity value which would tell you how much would need to be invested privately to give you the same income.

It is very important to make sure you fully understand the process and are in control of it. There is lots of support and advice available on the site. We also provide a number of cost effective fixed price support services aimed at helping people reach agreement.

Hadenoughnow

Thank you. That's all very clear.

We are lucky i guess in that we could both afford a small home that could accommodate our children although not as comfortably as in the family home. So our housing needs could be met.

The problem is income for me although I have an ok part time job 3.5 days a week. I've been looking for a ft job for a while but i seem to be the wrong age!

I know my husband wants to avoid FormE and pension sharing of final salary pensions because of the costs. But when I do the comparison you suggested, the cevt figures are really low compared to the actual monthly pension it promises. So compared with my pensions, I will be about £15k a year worse off than him. In fact, my total annual private pension would be about £8k.

It wouldn't be fair for him to lose out on equity, but he would need to accept pension sharing if we don't use offsetting I assume?

There's also a small business that he doesn't want to take cash out of, so that should be offset against the house, but again that would give him less equity for a house.

I'm going to have to write it all down and try to have a reasonable conversation with him. I just want to be amicable without walking away without enough to live on.