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Pensions Beware

People have always acknowledged that, on the breakdown of a marriage, the house and its contents, savings, cars and the like needed to be divided.

For many years though pensions were ignored, and as a result the person with the pension (or the biggest pension) got away with keeping, free of any claim by the other, what may have been the most valuable matrimonial asset. That changed in the 1990s, and the Courts started to take a much bigger interest in pensions ensuring they were considered and divided along with the other assets.

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Earmarking

There were several ways pensions could be dealt with, one of which was pension "earmarking". With this option, when the pensioner starts to draw retirement benefits, part of those benefits are paid to the former spouse.

An unintended consequence of the recent pension reforms, which allow people to take their pension funds as cash lump sums rather than converting the fund into an annuity, is that people can cash in the whole of the pension pot from the age of 55. If they do this there would be no pension pot to allow the former spouse to receive their “earmarked” pension.

Review Position Urgently

Those of you who opted for an order” earmarking” your spouse’s pension on divorce will need to review your position urgently, and certainly before your former spouse has taken the cash and emptied the pension fund. At Lanyon Bowdler we have specialist family lawyers in each office and will be happy to discuss this issue with you, whether we acted for you in your divorce or you were represented by another firm of solicitors.