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The Financial Relief Process

Questions about The Financial Relief Process

1. I’ve just started my divorce and Pensions confuse me!

The first thing is not to panic. You are not alone in knowing little or nothing about pensions.

Reading through these Q&As should give you an overview of the process and options for dealing with pensions on divorce.  You may also benefit by visiting the divorce section on the Citizens Advice Bureau’s website.

Then you will be in a position to work out what professional help you need.  If you are intending to use a solicitor you should question them closely as to their knowledge of pensions.  Family law solicitors have a wide range of issues to master and, put simply, pensions are less important than children and other personal matters.

You might wish to consider using a financial advisor, who are experts in personal finance.  Though again question them closely as not all advisors are specialists in the areas of divorce and pensions that will probably concern you most.

Finally, keep checking on our site which guides you through the different steps and has answers to many of the questions that will arise.

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 2. Do I need a Solicitor?

It is not essential to use a solicitor, though it is often preferable.

Common advice is to use a solicitor when:

  • you have children;
  • you have been married for more than about 5 years; or
  • you have assets other than your family house and car.

Assuming you want to use a solicitor then the normal rules for using professionals apply.  Do they seem to know what they are talking about?  Will they admit to areas in which other advice will be required?  Can you get along with them personally?  Are their costs reasonable?  As ever if in doubt then talk to others to find the one right for you.

If you decide not to use a solicitor, and pensions and other complications are involved, then be prepared to do a lot of reading to find out exactly what is required.  We are very happy to work for members of the public directly, but please note that we cannot provide advice and will need to charge if you require support that a solicitor would normally provide. You will also need to pay for our reports before we commence any work on them as we have no means to assess the creditworthiness of individuals.

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 3. Can a Financial Advisor help me?

In most cases, the answer is yes.  It is always good to have an expert to talk to, who can explain all the opportunities and technicalities.

A financial advisor can help you with an immediate financial issues.  You might for instance need to set up a 2nd home, or an individual bank account.

A financial advisor could also help you review your long-term financial aspirations.  This could help you with your new life plan, and shape the structure of your financial settlement.  The advisor could help you implement the settlement: setting up new pension arrangements as necessary, or generating income from any assets you receive.

Financial advisors are not actuaries and will usually ask actuaries, such as those at EPS, if reports on pension values for offsetting or rates for pension sharing orders are needed.

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 4. Scottish Law – how does it differ?

Getting divorced under Scottish Law differs substantially in process and procedure to getting divorced under English Law.  It is not possible to explain all the differences here, and indeed they are irrelevant in most cases as most people do not find the need to experience both.

However information is often framed in terms of English Law and we are as guilty as the rest.  In practice most of the steps and solutions are similar and in respect of pensions it is only necessary to highlight the key differences.

  • Only pensions accrued during marriage are included in the matrimonial assets for division.  There are specific rules defining the start and end dates of the marriage for this purpose.
  • For pensions accrued both in and out of the marriage it is defined that the proportion of the pension accrued during marriage will be pro-rata to the time married.  So if a pension is accrued over 30 years, of which 20 were during the period of marriage, then 2/3rds of the total pension value should be included in the matrimonial assets.
  • You cannot make an attachment order on pension income.
  • A pension sharing order must be expressed in terms of the number of pounds of CETV to be shared, rather than the percentage of the CETV.

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