What is the pension sharing order process?
You may not even know where to start when it comes to a divorce, let alone a pension sharing order. It can be a highly stressful time with your financial assets being pulled in every direction possible.
However, a pension sharing order doesn’t have to complicate things. The process of a pension sharing order can be quite simple with the right financial advice. The basis of it is purely finding out the worth and value of yours or your party’s pension, and then devising a fair amount for each of you to be comfortable with moving forward with your lives. If you aren’t able to come to this on your own terms, the court will calculate a fair amount for you, so you know that your assets will always be analysed professionally.
But as stated previously, is to seek a financial advisor to help make your concerns a reality.
They can help ensure you understand how your assets are going to be calculated and what is a fair and reasonable amount to settle with.
When you’re looking into your pension value, you need to consider both your private and state pension, if you have one. State pensions are handled slightly different and aren’t generally split in a pension sharing order, unless under specific and exceptional circumstances.
This is also where you may need to seek further advice from a financial advisor as if your pension is on a final salary pension scheme, you will need to have a professional evaluation. If you have a personal pension, it’s just as easy as looking at your latest annual statement.
This will help you understand what your pension is worth and give you a transfer value figure, which is what the court will use when they need to assess your case.
A typical workplace pension can usually be coined under a defined contribution. This is where you pay a set amount into your pension each month. Again, this is as simple as looking at your annual statement to give you the transfer value of your pension.
Once you have all the information you need, the next step is applying for your pension sharing order. You need this to be done through a court order as part of your divorce. During this process it is best to consult with your financial advisor to go over the finer details. The application itself will be submitted by a trustee, who will then report back on its progress and implementation time. The court will then review the terms and calculate any percentages if need be. A court order process is up to 4 months in England and Wales and 2 months in Scotland.
Once the decision has been finalised, the trustee has 21 days to report back, including a timeframe of 7 days for an appeal or reversal. It should be noted that charges will be applied from your trustees and a cost should be discussed between both parties before the go ahead.
Once the application has been completed, you then have a massive chunk of financial weight lifted off your shoulders.
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