Divorce is a challenging time, not only emotionally but also financially. Among the various assets that come into play during a financial settlement, pensions often stand out as one of the most significant—and yet frequently overlooked—elements.
A recent report has highlighted the plight of hundreds of teachers being unable to proceed with their divorces due to long delays in working out the value of their pensions. The BBC article reported that up to 2000 teachers were waiting for a Cash Equivalent Transfer Valuation (CETV) in December 2024, which was preventing them from being able to move forward with their divorce settlements.
Here, we look at the importance of pensions during divorce and how professional advice can be crucial to securing a fair settlement.
Why Are Pensions So Important?
For many individuals, pensions are one of the largest financial assets they hold, sometimes even exceeding the value of their share of a home or property. Whether it’s a workplace scheme, a private pension, or a combination of both, pensions represent years of accumulated savings and contributions that can significantly impact each party’s financial security post-divorce.
Failing to account for pensions properly can result in an unfair settlement, leaving one party at a considerable disadvantage. A number of recent reports have highlighted the growing awareness of this issue, with calls for better advice and understanding around pensions during divorce settlements.
What Can Go Wrong?
Without expert advice, it’s easy to misjudge the value or significance of pensions. Common pitfalls include:
- Undervaluing the pension pot: The true value of a pension isn’t just the amount currently held but also its potential to grow over time.
- Ignoring the need for specialist advice: Understanding the nuances of pension sharing, offsetting, or earmarking requires expertise.
- Failing to consider future needs: A settlement that seems fair now might not provide adequate support in retirement.
At O’Donnell Solicitors, we work with a network of trusted financial advisors who can help to obtain a comprehensive valuation of pensions and provide advice on the best approach to dividing pension assets.
By collaborating with these experts, we ensure that you have all the information and advice needed to make informed decisions and secure a fair outcome.
Contact our Experienced Family Law Solicitors
Divorce is a time of change, but with the right support, it can also be an opportunity to lay the foundation for a secure financial future. At O’Donnell Solicitors, we’re committed to helping our clients achieve fair financial settlements, ensuring that all assets, including pensions, are fully taken into consideration.
If you’re facing divorce and want to understand more about how pensions might impact your settlement, get in touch with our experienced team today. With our expertise and network of professional contacts, we’re here to guide you every step of the way.
