DIY Divorce – are you missing out on pension benefits?
Since the introduction of the no-fault divorce in April 2022, there has not surprisingly been an increase in people finalising their own divorce and finances, referred to as a ‘DIY divorce’.
However, this has also meant that there has been an increase in people not obtaining legal advice and a recent survey found that 71% of people doing a ‘DIY divorce’ hadn’t included pensions in their financial settlement. Ministry of Justice figures have also shown that applications for pension sharing orders are down 35%.
Worryingly, it would appear that the majority of people finalising their own divorce and finances, are not even considering the division of pensions, which more often than not is crucial to ensuring that a person receives their fair share of the assets.
As your pension is not a tangible asset, most people do not consider it as part of the assets that need to be shared. However, your pension is usually one of the most important assets.
Not including pensions in your financial settlement can result in you coming out of the divorce with less than what you may be entitled to. More commonly, older women tend to have smaller pensions, due to lower incomes and spending time out of work to look after children. Therefore, it is crucial that pensions are considered as part of the financial disclosure and negotiations when looking to a fair division of assets.
There are many options available when considering pensions and you do not necessarily have to have a pension share. It may be that one party is looking to keep their pension intact and therefore a pension offset may be the preferred option. It is important to therefore ensure that you have all of the financial information available to you before agreeing a settlement.
This highlights the importance of ensuring you get legal advice when trying to reach a financial settlement with your spouse. We can have as much or as little input as you wish but it is crucial to ensure that you have obtained and considered all the pertinent information to avoid an unequal and potentially unfair division of the asset. If, when reaching an agreement concerning the division of the assets, your pensions are not considered you may find that you are left in a position whereby you have inadequate pension savings when it matters most.
At Kuits, we understand that going through a divorce is one of the most stressful times in your life and it can become incredibly costly but not finalising your divorce correctly and not dealing with pensions can prove to be a huge mistake and even more costly later down the line. We can ensure that you receive the best possible advice with regards to reaching a financial settlement, which is fair and protects you in the future.