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Pension Sharing Orders

Emotions run high when a relationship ends, and mediation can help to discuss some of the practical issues such as finances and arrangements for children and pets. Mediation provides the forum and the process, but it must be a voluntary process.

A surprising number of people don’t tie up all the loose ends after a divorce, so if you would like advice or support on any aspect of a financial order made as part of your divorce, please get in touch with Sunita and the team.

My wife and I divorced 15 years ago but on the advice of my wife’s IFA she didn’t push to finalise matters regarding my pension, and she has now asked for 50% of its value. Is this right that she can ask for this now given the payments made into it and the gains in the last 15 years, or should it be based on what it was worth back then which was considerably less?

It is unfortunate that the approved pension sharing order was not implemented at the time of your divorce 15 years ago, however there is no time limit on the implementation, but the amount your ex-wife is entitled to today may vary depending on relevant factors.

If your ex-wife had received the 50% of your pension as it was valued then, this would have been put into a new or existing pension pot for her to manage and contribute to if she had the funds.

It is difficult for any solicitor or court to quantify what the original 50% she was entitled to is now worth, as there are a number of variables to take into account.  It is therefore recommended that a Pensions on Divorce Expert (PODE) be instructed to assist.

The PODE will consider the original figure your ex-wife would have received and apply the relevant formulas to calculate the equivalent amount based on whether (a) contributions were made and if so, to what extent and (b) if no contributions were made.  The PODE will also look at the historic investment returns.

The recommended figure provided by the PODE will be an amount for you to consider and negotiate/discuss with your ex-wife.  If you offer an amount based on no contributions, your ex-wife may argue that the amount should be higher as she may have made contributions.  The onus will be on her to prove that she had the surplus means over the last 15 years to make the contributions. She may even instruct a PODE herself to help with these calculations.

Ideally, you should both agree on what the final figure should be but where agreement cannot be reached an application to court can be made for a Judge to ultimately decide.  This will involve additional costs and time.

It is most important for all terms of a sealed order to be implemented in accordance with the terms of the order and in the case of a pension sharing order, to be implemented sooner rather than later to avoid such complications and uncertainty at a later date.

Sunita Chauhan can be contacted at s.chauhan@gullands.com