New national guidance for pensions on divorce published
A new guide to the treatment of pensions on divorce has been published by the Pension Advisory Group (PAG).
The long-awaited report brings guidance to family judges, lawyers and pension experts encouraging fairer settlements and helping to manage liability.
PAG is a multi-disciplinary group of professionals, including The University of Manchester’s Professor of Social Gerontology Debora Price. It has come together to produce a clear good practice guide to address the shortfall in understanding of how to treat pensions on divorce.
Supported by the Nuffield Foundation, the group’s aim was to create a guide that demystifies the jargon of pensions, and improve communication amongst the professionals working in this field across England & Wales.
The guide’s creation stemmed from the need to address the wide variation of financial settlements nationally which stems from a lack of understanding of how professionals should deal with the valuation, sharing or offsetting of pension fund assets.
Next to property, pensions are often the largest asset in a divorce settlement, and their complexity is laden with risk which has in recent years caught the attention of the claims management sector. The widespread deficiency in knowledge is not only a hindrance to the client, but also leaves professionals vulnerable to potential claims being brought against them.
It is vital that practitioners understand what to look out for when handling pensions, and are able to identify when they should seek specialist pensions advice to safeguard both their clients and themselves. In understanding how pensions on divorce should be approached advisers will be better placed to serve their clients with fair settlements and mitigate the potential claim of alleged negligence.
“The aim of this guide is to help judges and practitioners navigate their way with more confidence through the tricky field of pensions on divorce, and ultimately improve the fairness of outcomes for those going through divorce,” said project lead Hilary Woodward from Cardiff University.
We know that five out of six divorces do not feature a pension share, and that this is a very difficult and emotional topic for divorcing couples. We hope that with this report, there will be better understanding for everyone concerned about how important it is to think about the value of pensions and income in later life, even in the heat of a divorce.
Visit https://www.nuffieldfoundation.org/pensions-divorce-interdisciplinary-working-group for the guide, and for more information on PAG.