Expert Advice on Pensions When Getting a Divorce

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Monica Curtis, an Independent Financial Adviser at MC Financial Solutions, chats to Charlotte Southworth about pensions on divorce

MC Financial Solutions is an Independent Financial Advisory practice offering the full range of financial planning and advice services to its clients who are professional individuals and small-medium sized business owners. It is owned and run by Monica Curtis who has been Independent Financial Services Professional for more than a decade. She offers bespoke financial advice to individuals and businesses across the UK. She can be contacted at Jubilee House Globe Park, Third Avenue, Marlow, SL7 1EY. Tel: 01628 882999.

Please be aware that the value of your investments can fall as well as rise. You may not get back what you invest.

Preparing for separation

People often want to plan and prepare for divorce before the event, and often one of their biggest concerns is their pension provisions. Monica finds that people somewhat neglected their pensions, missing opportunities to move their investment to improve its performance, and not nominating beneficiaries to receive the benefit of their investment in the event of their death. When separation or divorce is imminent, the holder of a pension should consider making or changing their nomination so that the pension benefits do not automatically transfer to their spouse, or ex-spouse, on their death.

Investing in actuarial calculations and financial advice

When considering the division of the assets in the ‘matrimonial pot’ people often, understandably, prioritise their current circumstances, rather than worrying about how they will provide for themselves in their old age. Whilst there is an investment of time and costs to in obtaining an actuarial calculation, Monica’s view it that they are vital in many cases to ensure that the pensions are dealt with fairly. Couples are well advised to take it further than that, by speaking to an Independent Financial Adviser about their financial future and how any sharing of the pensions will impact on them, for example:

  • Will it impact on your pension allowances?
  • What tax issues could arise and how can they be mitigated?
  • With whom should you invest any transfer of pension being received, and do you need to pay into the new pension to ensure you have sufficient income in your retirement?
  • Would offsetting (trading pension provision for another asset/cash) work or leave you vulnerable in the future?

Looking forward, Monica would encourage everyone to review their pensions annually; pension companies are always changing their deals.

Drawing down

When divorcing couples are looking for liquidity in their assets to enable them to ‘do a deal’, pension drawdown is often muted. Monica would urge anyone considering this to take advice first as the consequences can be considerable, both in relation to taxation and restrictions on future pension contributions.

Life insurance

Depending on the terms of the financial settlement, the life insurance in place for one or both of the parties can be very important. Monica’s experience is that income protection is often forgotten, and she stresses that the change in circumstances can mean that different levels of protection are required. When separating, both parties should consider how best to deal with their insurance policies, they may need to update the nominated beneficiaries or consider placing the policy in trust.

Contact our divorce and family law experts today

If you would like to discuss any aspect of divorce and family law, divorce and pensions or want to draw up a pre or post-nuptial agreement or cohabitation agreement, call our mediation, divorce and family dispute resolution solicitors in absolute confidence on 03456 381381. Alternatively, email us at