Pensions and Divorce

Highly Experienced Pensions & Divorce Advisors

After a home, a pension fund can be the second largest asset owned by a family. On divorce or dissolution of a marriage, you can split pensions several ways but achieving a fair resolution of all the financial issues can be a very stressful process.

We are highly experienced pension advisors and specialise in advising clients and their legal representatives involved in divorce proceedings on how to achieve a fair resolution.

Our pension advisors can help with:

  • Establishing how much pensions are worth (work pensions, personal pensions and state pension)
  • Transfer value analysis
  • Advising on what can be divided (the rules for England & Wales differ to Scotland)
  • Do you need a court order?
  • Post-retirement divorce
  • The financial impact of divorce
  • Post-divorce financial planning

We’re here for all the big moments in your life and after a big life change, we can help with lifetime financial forecasting so you better understand your current financial situation and future, retirement planning and later life planning.

Book Consultation

To book your initial consultation (no cost or obligation), please fill in the form below with your details and one of our financial planning experts will be in touch.

“I have been delighted not only with the standard of advice, but also with the administrative back-up of Francis Clark. The three key elements for me in a financial advisor are trust, empathy and good communication skills and Ian ticks all those boxes and more.”
Client, Exeter
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Retirement Planning FAQs

  • What is the difference between a defined contribution and defined benefit (or final salary) pension?

    A defined benefit pension (also known as a final salary pension) is usually set up by your employer. It guarantees you a regular income in retirement, usually based on your salary and the number of years you have worked. The level of income may also increase in line with inflation.

    On the other hand, defined contribution pensions do not offer you a guaranteed level of income. The amount of money you will have in retirement depends on how much you or your employer has contributed and how well your pension investments have performed.

  • How much can you pay into a pension?

    Usually you can pay as much as you earn each tax year into your pension, up to a maximum of £40,000. This is your annual allowance.

    The allowance reduces for people with an adjusted annual income of £240,000 or more, down to a minimum of £4,000. This is known as the tapered annual allowance.

  • What is the tapered annual allowance?

    The usual £40,000 annual pension allowance is cut for people with an adjusted annual income of £240,000 or more. The allowance reduces by £1 for every £2 of income above £240,000, down to a minimum of £4,000. This is known as the tapered annual allowance.

  • What is pension carry forward?

    Pension carry forward lets you pay more than your annual allowance into your pension by ‘carrying forward’ unused allowance from the previous three tax years (as long as you have sufficient earnings). You still will receive tax relief on the payments and it can be useful for those affected by the tapered allowance.

  • What is the lifetime allowance and how much is the tax charge for breaching it?

    The lifetime allowance is the amount you can hold in your pension over your lifetime. The allowance is currently at £1.0731 million. Your pension is assessed against the allowance when you take benefits, die or reach age 75. Any excess is taxed at 25% on top of Income Tax if taken as income, or 55% if taken as a lump sum.

  • What are the tax benefits of pensions?

    Investments in pensions grow free from Income Tax and Capital Gains Tax. Pension contributions are paid from gross (pre-tax) income. Where tax has already been paid on a pension contribution it is refunded. The taxman will automatically top up pension contributions up to your annual allowance by 20% to cover basic rate tax. Higher or additional-rate taxpayers can then claim back any higher or additional-rate tax that they have paid on contributions through their tax return.

  • What are your options for taking an income from your pensions?

    You can normally take up to 25% of your pension tax-free – either as a single lump sum or as a series of smaller withdrawals. You can also take a regular income from your pension by making lump sum withdrawals, buying an annuity or setting up income drawdown.

  • What happens to a pension when you die?

    A defined benefit (final salary) pension will usually stop paying an income when you or, if your pension income passes onto a dependant, your dependant dies. A defined contribution pension can be passed on to your beneficiaries. If you die before the age of 75 the pension will be passed on tax-free. If you die after 75, your beneficiaries will pay their usual rate of Income Tax on any money taken from the pension.

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