Divorce settlements eating into pensions

New research has revealed that pension sharing orders are becoming increasingly more common in divorce settlements in Northern Ireland and the rest of the UK.

Figures obtained by Hugh James Solicitors reveal a consistent increase in the number of pension sharing orders in the years up to and including 2011 - no data available beyond 2011 as yet. Traditionally a divorce settlement would involve the family home and other assets that could be sold or separated out. However, it is considered that because there is on average less equity owned by home owners, the sale of the matrimonial home is no longer sufficient to fund two separate houses, and deal with other costs such as child maintenance.

As such the divorce courts are having to go beyond the traditional assets in order to fund a divorce settlement, and pension pots are often the first target. The difficulty created is that the income available when it comes to retirement is significantly less, with Prudential calculating that divorced pension holders can expect to receive an annual income that is £2,600 lesser than someone who has not gone through a separation.

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