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Divorcees&#39 pension warning

Couples contemplating a divorce should consider the full value of any pension scheme benefits, according to consultant actuary The Resolve Partnership.

It says the true value of a pension is often overlooked and that spouses should be receiving up to double the current amount of their partner&#39s occupational pension through divorce settlements.

Resolve believes the pension sharing provisions of the Welfare Reform and Pensions Act of 1999 often result in the divorced spouse failing to get a fair share of a partner&#39s pension.

It says the faults lie in the method of valuing the pension fund, which is based on a cash-equivalent transfer value at the time of the divorce rather than the value of the eventual pension.

Resolve says this means the amount being divided up is undervalued because the divorcee does not benefit from a fair share of the pension&#39s final value.

Valuing the final value of the pension rather than at the time of divorce can mean the difference between receiving a share of a £70,000 pension or a £130,000 pension, it says.

Resolve Partnership director Keith Williams says: “It is vital that people undergoing divorce ensure a solicitor looks at the value of their ex-spouse&#39s pension scheme so they receive their fair share. The difficulty is that pension rules have been made far too complicated.”

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