I’m divorcing after 26 years of marriage. My husband is 73 and I’m 61.
He has a high value company pension and I have a small company pension due to part-time working to bring up the children.
We have been separated almost three years now and I live with a new partner. He has agreed to share his pension with me but only 19.38 per cent which is the proportion of income accrued during our marriage, him having paid into his company pension for 25 years prior to our marriage.
Splitting retirement savings: My husband is offering me a fifth of his pension after a 26-year marriage – is that fair? (Stock image)
It seems I have no entitlement to any of this unless he agrees to share some of it with me or we go to court.
My solicitor thinks it’s risky to go the court route as there are many different interpretations of ‘fair’.
I thought courts tried to rationalise incomes in retirement, clearly I am wrong about this.
If I accept my husband’s offer I would have less than half of the income that he is receiving, along with a five-year wait for my state pension.
His annual income would still be five figures plus his state pension and exceeds what he needs to live on.
He is trying to take into account the fact that I may inherit money from my mum should she not use all her assets on care before she dies and that I have the benefit of my partner’s income.
Should he leave me or die I have no rights as a co habitee. I really don’t know which way to turn as if I accept his offer it doesn’t compensate me for the pension I lost out on by not working full time and having no promotion prospects because of my part time working.
We have divided all other assets on a 50/50 basis and he has our two adult children living with him.
Any advice would be fantastic as I am at my wits end to get enough pension to live a comfortable life on and he has a very comfortable secure future.
Fiona Wood: The longer the marriage the less likely it is a judge will say assets should be retained by the person who had them at the start
Fiona Wood, partner at McAlister Family Law, replies: I am pleased to note that your husband agrees to divide the non-pension assets equally as part of your divorce settlement.
However, he only wants to offer you 19.38 per cent of his pension.
While I do not have full details of both your financial circumstances, I suspect that his offer relating to pensions is less than what you are entitled to.
How do the courts usually approach splitting pensions?
The starting point, when dividing assets on divorce, is an equal division of the capital assets and pension provisions.
However, this is just the starting point.
The law governing financial settlements is a law of discretion, so I am afraid that a lawyer cannot predict precisely what settlement you should receive.
There are various factors that a judge must take into when considering what a fair settlement is.
These include the length of the marriage, the assets that you both brought into the marriage, your respective ages, your respective incomes and earning capacities and most importantly your respective needs.
How might this apply in your case?
You have been married for 26 years. This is a long marriage in divorce terms.
The longer the marriage the less likely it is that a judge will say that assets brought into the marriage should be retained by the person who had them at the time of the marriage.
Even in shorter marriages a judge will only do this if both spouse’s income and capital needs can be met from the remaining assets.
I am assuming that your husband has retired, given his age. He appears to have a healthy income from his private pension and from his state pension, which you state exceeds his income needs.
You are still working. Whilst you have a pension, you state that it is small. You will also receive your state pension in five years.
You will presumably continue to accumulate pension between now and your retirement, although this is very unlikely to increase your pension to the size of your husband’s.
If you accept your husband’s offer, you state that you will have less than half of the income that he is receiving now. I do not think that a judge would think this fair or that it meets your needs on retirement.
The fact that you may inherit money from your mother is irrelevant and will be ignored by a judge as there is no guarantee that you will inherit from her and if you do how much you will inherit and when.
With regard to the fact that you are cohabiting, your cohabitee’s income would be relevant if you were claiming spousal maintenance from your husband, but not regarding your claim upon his pension.
His pension is a matrimonial asset upon which you have a claim as a result of you being married for 26 years.
How is the exact pension split worked out by the courts?
Often in this scenario an actuary is instructed to calculate the percentage of your husband’s pension that you require by way of a pension sharing order to provide you and your husband with the same pension income from both private and state pensions.
Some judges may want to factor in the pension contributions that you are likely to make between now and you reaching state retirement age when undertaking this calculation.
Whilst you are unlikely to receive half of your husband’ pension, as you already have a pension of your own and can make further contributions to this between now and retirement, it would appear that you will require significantly more of his pension than he is offering in order to achieve this.
Whilst the law governing this matter is a law of discretion and therefore the outcome is difficult to predict precisely, it would appear that what your husband is offering with regard to pensions does not meet your needs and therefore you should go to court if your husband will not offer more pension.
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