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Where Taxpayers and Advisers Meet

Pension & Divorce

chambersiain
Posts:41
Joined:Sun Feb 06, 2022 4:58 pm
Pension & Divorce

Postby chambersiain » Tue Feb 15, 2022 7:58 pm

I've had some great advice from this forum and told a friend how TW experts helped me.

My friend is looking for some advice before starting the process of separating from his wife of nearly 30 years. This is a mutual separation and they have discussed assets being divided equally.

The question is around his pension and life time allowance.

He is 53 his pension pot is currently valued around £1.3M he is registered for £1.5M LTA and stopped paying into his pension.

His wife is 48 her pension pot is currently valued around £300K and she continues to contribute.

They have agreed that he will give her £500K from his so they both have £800K.

Questions

1. What happens to his LTA is the £1.5M revised down to reflect the transfer. Does his wife again a proportion of his LTA?

2. Can the LTA to be removed so that he can resume paying into his pension?

3. How do the pension providers deal with the transfer will it be kept in a pension wrapper?

Any help much appreciated

ben_power
Posts:81
Joined:Tue Feb 27, 2018 8:34 pm

Re: Pension & Divorce

Postby ben_power » Fri Feb 18, 2022 12:02 am

Hi,

This is complex and more questions arise from each of your points so i thought the following link might help you navigate what you're after.

https://techzone.abrdn.com/public/pensions/Tech-guide-pension-sharing-lta

chambersiain
Posts:41
Joined:Sun Feb 06, 2022 4:58 pm

Re: Pension & Divorce

Postby chambersiain » Sat Feb 19, 2022 10:53 am

Thank you From the long list of options presented in the document you referred to it would appear they are only concerned with "Pension Sharing and Fixed Protection":

https://techzone.abrdn.com/public/pensions/Tech-guide-pension-sharing-lta#anchor_5

Neither have crytsalised their pot (ages previously given) so won't be receiving payment from their pension.

From what we read:

1. There is no transfer of LTA (pension credit factor) as the pot is uncrystallised.

2. Fixed protection is not affected when pension benefits are reduced as a result of a pension debit under a divorce settlement, however making contributions to rebuild the pension will result in fixed protection being lost.

Just out of interest what further questions did you need that weren't provided in the original brief? I assume it was around Fixed and Individual Protection? He has Fixed Protection


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