How much pension will I lose?

Hi Folks
I would appreciate any thoughts, comments or ideas about my situation which I outline below.
Me: Husband aged 63
Wife aged 51
Married 8 years this Christmas. Previous co-habiting approx 10 years
.
Step-daughter aged 22 (lives independently)
Daughter about to turn 17. At sixth form (year 12).

I joined Police in December 1982, and commenced membership of pension scheme immediately. This was 20 years before relationship started.
Retired from Police in Jan 2013 and drew pension. We had been married a week when I first started drawing pension. Lump sum of £169000 went to pay mortgage off and family expenses. Police pension now £28,300 p.a.

I currently work as a Police civvie on £28,250 p.a. and contributing to a further pension which as of today would generate £4477.64 pa in pension.

Wife works as part time carer on £750 pcm and has a tiny pension that will pay about £1500 p.a. on her retirement at 67.

We have a jointly owned house valued approximately £550,000 with about £20,000 left on a mortgage. We don’t have significant savings apart from £5500 in my wife’s ISA which she regards as a sort of pension pot. We don’t have significant debts apart from £2000 on interest free credit card (in my name)

My wife has asked for £350000 of the equity for house for her and our daughter. After me paying the mortgage and costs (total appx £35000) This would leave me with £165,000 to sort a house for me. This is doable if I can keep enough of my pension income.
I hope my daughter will feel free to come and go as she pleases and I don’t want to argue about how many days of the week she spends at each place.
I have got my head around the idea that the essential issue is meeting needs and not fairness or ownership.
My needs are for a home with no mortgage or a small mortgage and enough income to make retirement viable in just over 2 years time. She has much less earning capacity but could work full time and has 17 years to improve her own pension.
Given my outline of the possible equity share how much of my pensions would I need to give her? 1. Police already in receipt, £28,300 2. Civvie £4477 if I retired today?
I appreciate that Solicitors will require transfer values which I am obtaining but in my situation the income can been seen accurately. Clearly I am hoping that by giving up the lion’s share of the equity I can keep significantly more than 50% of my pension income or retirement will not be a nice prospect.
Any thoughts or ideas on how to approach this would be welcome.

Hi ladadad,

I was in a similar position (as the wife) when we split 4 years ago. The ex was a retired policeman with 4 years of pension in payment.

Obviously each case is taken on its own merits but it might help you to hear what happened in my case.

We were a bit younger, me then 45 and him then 53. With you being a little closer to retirement it might affect the outcome differently.

Together 20 years, two kids then aged 16 and 14.
House equity £420k (30k mortgage). His pension CETV Over £700k - £30k per annum. Him part time job earning £40k, me part time earning £10k.
15 years of his pension was earned before we met, and in our case the judge discounted that from the overall pot.

The ex decided the kids and I deserved nothing, gave up his new job to get out of paying extra child maintenance. I immediately got a full time job as I think your wife will have to accept she does too (not paying a lot but I love it). And unfortunately we went the court route to the bitter end as he refused to negotiate. This cost over £75k between us so definitely avoid if you can.

I was mostly interested in the equity as I wanted stability for the kids. He wanted half the equity and all his pension !! Tbf whatever I then thought of him he had earned his pension and never went after it.

At the final hearing the judge awarded me 70/30 on the house equity and 25% pension share. But the next day the ex decided he wasn't happy with this and in an unusual move offered me 100/% of the house for no pension share. This cost another £4K in legal fees as the judge wasn't happy about it. Basically I swapped £186k for £70k in equity which might seem nuts but it was the best conclusion for the kids and I. We got to stay in the house. He had moved in with the OW so housing wasn't an issue for him.

Obviously in your case, your housing needs still need to be considered.

Basically the courts are looking for parity (especially in retirement) and as close to a 50/50 split as possible. You might find that a large portion of your police pension can be discounted from the pot if you can reach an agreement around that.

Are you amicable ? Your attitude sounds very healthy towards things and that will help you and your daughter a lot. My ex still hasn't bothered to see my kids in 4 years (but that's another whole thread).

Have you had legal advice as to what position you might take ?
There was a service on this site which proved invaluable to me (far better than my solicitor).

Anyway good luck and this is just one outcome but hope it gives you a little more insight into the possibilities.

Hi Hatton1
Thanks for your reply. Great to learn about your experience and this has been so valuable to me. Just composed a lengthy reply which got time out, and then lost! so will follow up later with my observations!

Hi,
Yes the same thing happened to my first post. I think I clicked ‘Quick reply’ ? So the 2nd time of writing I clicked ‘Action’ and then ‘Reply’ instead and that seemed to work.

Hi Hatton1

I really appreciate your reply and it is probably the single best resource I’ve accessed so far. It is a reminder that we should negotiate and avoid a court dispute at all costs I think.
I think my biggest problem is my wife’s understanding that we need to consider equity, income and pension in a coordinated way. Especially if I give up a significant share of equity I would expect to get correspondingly more of the income. How do we work that out?
I’m also frustrated by the role of CETV ‘valuation’. It seems a number that is not as significant as the actual income you can see each month now that I am actually drawing it. I can’t turn my pension income into a lump sum or a house but my wife feels they roughly equate so it is fair to expect me to leave the house and take the pension. So we are amicable enough but there are some pinch points to get over and this might change things.

Hi Ladadad,

Really glad it was of some help. I’m no expert at all, just someone who has been through the process and who received a lot of help and support on this site.

Yes definitely avoid court if you can, you end up totally at the mercy of a judge and usually no one ends up happy with the outcome. The costs are farcical and you get a lot more grey hair. That’s great you are on good terms, it should help a lot.

I think I always worked on worst case scenario and what was the absolute minimum I could manage with, or the least a judge might award, and anything else was a bonus.

What’s your bottom line basically ?

I can try and give you some ideas based on my case but obviously no guarantee it would be the same for you.

Ok so if I make some sweeping assumptions about the figures it’s just to give an idea.
House equity - £520k
Your pensions - £ 600k to £800k (with both police and Civil one and basing it on a similar £30k pa to my ex)

If your wife wants £350k equity And leaving you with £165k that’s a 66/33 split in her favour.

So if your pension pot was split 33/66 to you, would that give you a comfortable enough amount to retire in a couple of years ? Again it’s a guess but if it’s around £35k per annum then 1/3 off that would be £24k pension.

But there are so many variables to consider.
Hopefully you will be able to agree it but if it unfortunately ends up in court you can kind of get an idea of how a judge might view it.

The fact that you are (hopefully) pretty near retirement means your pension needs are more prominent and maybe your mortgage capacity is less.
Your wife wouldn’t be able to access any of the police pension until she was 60, so it might not be her priority. And like me still has quite a few years to build up her own pension pot.
A judge might discount a large chunk of your pension accrued pre the relationship and cohabitating.
A lot of the time £1 pension is not worth the same as £1 equity.
Does your wife want to buy you out of the marital home ? If so will she be able to get a mortgage ?
Will she be willing to do full time work ? Because otherwise at the moment there’s a disparity in your incomes but if there’s no reason she can’t work more hours then a judge might discount that more.
A court always looks at if someone is ‘over housed’ ie have more bedrooms than they need.
You both still want and need to provide a home for yourselves and your daughter. Would the equity split you’ve suggested manage that ?

Do you know how far apart you are on what you want ?
There is always the option of meditation (didn’t work for us as ex was a bit of a bully) but it definitely can help parties see the other person’s side.

Sorry I’ve probably given you more questions than answers here !!

But in my case he ended up with £700k pension, 60k savings, 25k in assets
I ended up with £450k mortgage free house, and £20k to pay off some of the legal fees, £4K assets.
So on paper that’s not a 50/50 split at all.

However it’s what worked best for me. Ironically I asked to settle at the start for a lot less, than what I finally ended up with, and he is still very bitter.

Just try to keep talking and hopefully you’ll find an arrangement you both can be (relatively) happy with.

Sorry didn’t realise this was so long !

Lastly it might be worth getting some one off legal advice to gauge your position as well ?