New research from wealth management group Succession Wealth, found that up to 550 UK couples, each with net financial wealth of £1 million or more, will divorce this year.

This group holds around £1.91 billion of net wealth in aggregate, or an average of £3.48 million per couple. Its analysis suggests that 43% is held in private pensions, followed by 31% in property wealth.

The research showed the importance of pension sharing on divorce. People often prioritise the family home, but pensions can be just as valuable if not more so.

The split

Divorcees have three different options to split pensions:

Offsetting: This is where the value of the pension is offset against other assets, such as the family home. It is often seen as the simplest option and can give divorcing couples a clean break.

Attachment or earmarking: When one party starts to take their pension, the other spouse is entitled to a share. The problem is that they won’t receive anything until their ex decides to take their retirement, which may take a while. It tends to be used if there are no assets to offset

Sharing: One spouse gets a share (%) of the other’s pension, which is either held in the same scheme or transferred to a personal pension scheme. This is a popular option and gets round the problem of a lack of alternative assets to split

You can agree an offset order between you but only a court can make a pension sharing or attachment order.  You may need an independent person to value the pensions and agree the right share. For a pension sharing order, the court will issue the appropriate documents and you shouldn’t have to deal with your ex again to get hold of your money.

Source: Succession Wealth