What do I do with my share?

Posted August 20th, 2009

Since 2000, a pension sharing order has been available as an option on divorce. With the ability to achieve a clean break this should be the option of choice for most divorce cases where the pension benefits are significant (and earmarking / offsetting have been discounted).

A lot of focus is rightly given to ensuring that an equitable pension share is achieved and here the use of a suitable actuary is advisable. However, in my opinion, less time is given to the options available once the pension share has been calculated and many clients approach this stage with unnecessary fear and trepidation.

Options

With a pension share there are two options – an internal or external transfer – and either option can have its merits depending upon circumstances.

With an internal transfer the pension does not physically move from the existing scheme but a debit and credit is created to satisfy the pension share. Most importantly, the internal scheme benefits can differ significantly. For example, some final salary schemes offer shadow membership whereby the same defined benefit rights generously apply to the new member whilst others provide poorer value money purchase equivalents.

With an external transfer the fund value of the pension share is physically transferred to a new arrangement in the individual’s name, with the associated issues of understanding the investment and annuity risks involved but having the benefit of control.

Considerations

Here are a few suggested considerations which will assist in deciding which type of transfer is appropriate.

* How flexible is retirement and who decides when retirement can start.
* How much pension income will be payable at retirement and how secure is it.
* How much risk is involved / could my pension fall in value.
* What are the death benefit arrangements and who will ultimately benefit.
* Can future pension contributions be paid.
* What are the charges involved.

If you would like more information on how we deal with pension sharing, please call us on 01204 663904 or contact us by email on advice@thedivorceifa.co.uk

Tags: , , , , , , , , , , , | Posted in Pension Sharing |
Comments: No Comments yet!

Is there anything different about you?

Posted August 4th, 2009

A change is as good as a rest they say, but the credit crunch and market volatility of recent months illustrate just how quickly our economic environment can change. Your personal circumstances can change quickly too – moving house, changing jobs or having children. Sometimes, things just don’t happen quite the way you planned.

Planning for change

Any significant changes in life should always prompt you to reconsider your investments – divorce is no different. A well planned portfolio will toil away on your behalf for years, working towards your objectives and riding out most of what the market can throw at it.

However, when your circumstances change, your needs and objectives can change too – and your portfolio may no longer be able to keep up. Such changes can mean you change your attitude to risk or need to reconsider the use of certain asset classes.

Even if your core investments might remain the same, there could be some higher risk holdings which need to be assessed. Or it could simply be time to take profits and move on to better opportunities.

Helping you meet your needs

A review of your portfolio will not take up a lot of time but every minute could more than pay for itself in money saved – or be put to better use. As independent investment advisers, we can help minimise the time but maximise the opportunity for you.

Here at The Divorce IFA, our portfolio review service is built on years of investment experience and comprehensive knowledge of what this industry can offer you. For more information, call us today on 01204 663904.

Tags: , , , , , , , , | Posted in Investment Advice |
Comments: No Comments yet!