Pension sharing & CETV - basic question

Hi

Currently having amicable divorce and aiming to agree low cost as we don't have much.

I have a pension, nothing substantial as only paid in for 5 years, but just wondering:

If we share it then seems most straightforward, am I understanding correctly that we simply split everything in there to date 50/50 and that anything I choose to pay in to pension after the divorce would be 100% my pension?


I know the other option is to take a % of CETV against house assets - I'm 25+ years off retirement and from forum seems I'd use 25% of pension CETV against house assets - again is that correct?

Would really appreciate any help you can give!

Hi.
A lot depends on the actual CEV as well as your ages, the length of the marriage and what other assets you have.
If the CEV is less than £100k you need to explore the costs of pension sharing. Generally speaking a CEV of less than £100k is not worth sharing;offsetting against equity would be more appropriate.

If there is to be an offset and you are many years from taking your oension, there would be some discounting. This is a controversial area but I think 25% is too little. My view would be a split in your 30s would be at 40 - 50% and in your 40s 50-60% of CEV. This is a very rough guide. You would need an actuary to work it out properly.

Hadenoughnow

You need to post more details of ages, incomes, assets, children and length of marriage for someone to comment.

If the pension is very small it probably won't be economically viable to split it.

Thanks everyone - appreciate the replies & help

I’m 43 and earn £45k pa, my wife is 46 and earns £10k

We have two children aged 9 and 7 and together/married for 17 years

We dont have much assets - house equity c. £40k

We plan for my wife to stay in house following divorce and i will retain a % (perhaps 40%) and then rent a house of similar size as our agreement is almost 50/50 childcare.

Although not massive pension CETV i think might still be a lot more than house equity so thinking was that it makes sense to split the pension 50/50 - that just feels right as we both walk away with a fair share of various money earned in marriage. Seems to cost £2k to set up which happy to pay.

This all feels like common sense but would it be normal?

Also unsure if i would be committing to share half the pension earned until this point or whether it would impact on any future pension i earn post divorce?

Thanks so much

Hmm. One big question here is the size of the outstanding mortgage and how it will be paid.

What is the market value of the property and how big is it?

If your ex is eligible for benefits, it may make financial sense for her to rent rather than you. It is worth checking this out. Does she have the capacity to increase her income?

You will need to think about how both of you will be housed once the children are independent.

Thank you!

We have an unusual situation as the mortgaged house is far cheaper to live in than the equivalent rental property as it is shared-ownership (so part rent part mortgage). To rent the equivalent house will cost c£300 per month more and really both are the smallest available for size of family.

Remaining mortgage is £55k and we’re happy to share that in whatever way ie i’d still pay a share despite not living there - something like a chargeback arrangement. My wife will be able to earn more income, hard to say exactly how much, but has a good chance of being able to buy me out.

We believe she will qualify for benefits which would give her way more than enough to live comfortably along with income child maintenance, share of mortgage. Does it make difference to benefits if rent or mortgage?

I’d have less to live on but would get by, and priority is to create a plan which works for the children.

Cant tell you how much i appreciate the advice!