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[Solved] 1-2-1 help - & how your pension could be key to ownership of the family home

 
(@Samantha Downes)
Eminent Member Registered

I've started a new thread for those of you wanting one-to-one financial guidance.
Now I've been writing quite a lot about pensions the last few weeks, particularly in relation to possible changes in the divorce laws. The government is considering looking at no fault divorces, which would speed up the divorce process. While this is probably to be welcomed some pension experts are worried that by speeding up divorce proceedings pensions may be neglected.
Let me explain a bit more. When you divorce your pension is legally acknowledged as an asset, my article here should help:

https://www.dad.info/divorce-and-separation/sorting-out-your-finances/what-happens-to-your-pension-when-you-split-up

But some experts are concerned that the process may get neglected - splitting a pension (particularly the final salary kind) can make months. Now the person whose pension the name is in (largely the husband) does not benefit - the pension company takes this money.
There is a lot of evidence to suggest women in particular may not be factoring the value of a pension when it comes to the family home; prioritising keeping the home rather than bother about the pension.
But if the pension is worth a considerable amount - this can actually be taken at age 55 as an asset to pay off a mortgage.
So when you are divorcing - don't forget your pension - it could be a useful bargaining tool when divorcing and deciding what to do with the family home. If you want any more info ask away

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Topic starter Posted : 19/09/2018 4:26 pm
actd
 actd
(@actd)
Illustrious Member

Hi Samantha, can I clarify, that if you take your pension as a lump sum, the first 25% is tax free, but the remainder will count as income and will be taxed accordingly. In which case , it may be worth taking a limited amount each year to pay of chunks of the mortgage, if doing so keeps you in a lower tax bracket.

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Posted : 20/09/2018 1:16 am
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