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Divorcees benefit in pension reform

Standard Life says many divorcees, especially women, are set to benefit from a change to pension legislation.

Restrictions imposed on pension benefits shared between former spouses will be scrapped from April 2009.

Currently, part of the pension benefits received by the non-member cannot be taken before age 60 and can only be taken as income, whereas the member can take benefits from age 50 and can receive 25 per cent as a tax-free lump sum.

Standard Life senior pensions policy manager Andrew Tully says: “This change is long overdue and will be especially beneficial to women, who are more likely to receive pension benefits as part of a divorce settlement. Giving people more flexibility to take pension benefits when and how it suits them best is a welcome development.

“When going through an emotional upheaval such as divorce or separation, pensions are unlikely to be at the forefront of people’s minds but starting afresh can have serious implications on your financial future, so it is crucial to take expert advice.”

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