Personal Pension  

New divorce rules need a clean break

    CPD
    Approx.30min

    “The recent well-publicised changes to pension regulations mean pension investments are virtually to be treated as bank accounts to people aged over 55, as these parties are. Why should someone receive more just on the basis of gender? There may have been an explanation when rules required the purchase of an annuity. However, to give the wife more than the husband, on account of either age or gender would seem to me to be unacceptable discrimination unless it is a case governed solely by needs.

    “I should expect courts to be most reluctant in the future – in bigger-money cases – to provide permission for actuarial reports on the issue of how to effect equality of income. Moreover, I suspect that annuities will, in the overwhelming majority of cases, become a thing of the past.”

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    The new rules offer greater flexibility and should make it easier to deal with pensions on a divorce settlement. However, they will take some time to bed in and, in the interim, there will be a lot of opportunities for advisers to work with clients and their legal representatives.

    Mike Morrison is head of platform technical at AJ Bell

    CPD
    Approx.30min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. Which of the following is NOT an option when sharing pensions on divorce?

    2. How does pension offsetting work?

    3. Under pension earmarking, the ex-spouse can potentially be left with no provision if the scheme member dies before retirement; true or false?

    4. Why could an ex-spouse not receive their full entitlement to a pension attachment order?

    5. What did Section 37 of the Matrimonial Causes Act 1973 prevent?

    6. What advantage does taking the pension as a cash lump sum have in divorce?

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