How can I secure my share of my ex-husband's pension?

admin
25 November 2014

Q

I’m currently trying to sort out my share of my ex-husband’s pension. He is a fireman and is due to retire in two years with a pension of around £323,000. I have a small pension worth £30,000. Our home has been put into my name due to the debts he accrued after he left and is valued at £100,000 with around £30,000 equity. He hasn’t paid me any maintenance for our three children, aged 11, 15 and 19. We were married for 12 years and lived together for four years before that - we have been separated for five years. The solicitor’s fees are crippling but I need to secure my financial future. Also, he has so many debts I am worried he will take the money and run.
From
MC/Lancashire

A

Your letter raises a number of issues that should be taken in order.

First of all, until finances are resolved, irrespective of the length of separation, you are entitled to make a claim for interim maintenance from your ex-husband for yourself, and thereafter, when the finances are resolved, a maintenance order for yourself that will last for a period that you may agree or that is ordered by the court.

The court will want to assess your income capacity to include in its calculations and assess any income shortfall that your ex-husband should be ordered to make up. Your entitlement will depend upon the net income of both of you and your reasonable needs. Pension income will be very relevant but also when and how the pension income will become payable. I can see that you are worried about a shortfall in income until you can draw down on your pension. So what can be done?

First, a general point that I hope you don’t mind me making. Please make sure you aren’t paying out too much in terms of outgoings and making life too hard for yourself.

You point out the house is already in your name, and this appears to be a trade-off in relation to debts. However, can you afford to stay in the house or is it more realistic to move to a cheaper house free of a mortgage to reduce your outgoings?

When you know how much you do need in terms of income going forward, it is appropriate to factor in the pension.

It is very important to ensure you have a correct valuation of the pensions. A pension can be valued in different ways, so you should agree to jointly appoint a pension expert with particular experience of the operation of the firefighters’ pension scheme, to value the pensions and advise how best to split the overall fund between you, and crucially advise how long you will need income for until you can draw your share, as I believe you cannot draw down on the firefighters’ pension until you reach retirement age.

The court can make a pension sharing order, sharing the entire fund, or it can give you capital out of the lump sum that is due from the pension and it can make a continuing maintenance order (as above) until the pension can be drawn.

An alternative is a pension attachment order so that income is paid directly from your ex-husband’s pension when he starts to draw it and a share of the lump sum but your income from the pension fund would end on his death. There are pros and cons to be considered in detail.

My advice is to put all the specific facts to the pension adviser and then decide overall which is best for you. I send you my best wishes for a speedy resolution of your problems.

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Marilyn Stowe is senior partner at Stowe Family Law