Posted February 8th, 2010
In many occupational schemes (especially the statutory ones – e.g. Police, Armed Forces) there has been a disparity between the normal retirement age of the member and that given to a pension credit member (the ex spouse). For example, the member can retire from the pension scheme at age 52 but the ex spouse cannot retire until age 60.
In addition, where the pension is in payment, there will be an immediate reduction of benefit for the member but the ex spouse’s pension will not kick in until age 60 (which could be many years away).
This issue has been neatly termed as “income gap syndrome” and it has been found not to go against the anti discrimination provisions of European Law.
Of course, this assumes that the ex spouse decides upon an internal transfer as the means to facilitate the pension share. There may be many reasons why the other option (an external transfer) is appropriate, but there will many situations where the only choice available is an internal transfer.
Regulations which came into force in April 2009 made provision for a partial solution to this issue which some of the statutory schemes are now starting to implement. The NHS scheme will now permit pension credit members to draw benefits after age 50 (or 55 from 6 April 2010) whilst an Armed Forces (2005) pension credit member can draw benefits at age 55. It should be noted that actuarial reductions will apply for early payment.
From a financial planning point of view it is wise to review the drawing of a pension credit benefit in line with your overall goals and objectives to ensure that any reduction is understood and budgeted for.
For more information on this please contact me on 0800 092 1229 or contact me by email, phil@thedivorceifa.co.uk
Tags: Actuarial Reductions, Armed Forces, Divorce, Early Payment, Ex Spouse, Financial Planning, Income Gap Syndrome, internal transfer, NHS Scheme, Normal Retirement Age, Occupational Scheme, Pension Credit, Pension Credit Member, Pension Scheme, pension share, Police, Spouse, Statutory Scheme | Posted in Pension Credit |
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Posted July 3rd, 2009
The Institute of Financial Planning is planning its second Financial Planning Week in September 2009.
For further information on the week, please click on the link below. If you would like further information on the Institute of Financial Planning, click on the logo above to be redirected to their site.
Financial Planning Week – Further information
Should you have any questions, please contact us on 01204 663904 or email – advice@thedivorceifa.co.uk
Tags: Financial Advice, Financial Planning, Financial Planning Week, Institute of Financial Planning | Posted in Financial Planning |
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Posted June 30th, 2009
I am often asked why you should use the services of an IFA during divorce work.
- What does an IFA do?
- What services do they offer?
- What benefit will dealing with an IFA bring me?
I have set out four main areas where I can add real value to your circumstances.
Pension reports
During the process of divorce, a report may be required by the court to understand the values of the pension assets and how these should be sensibly divided amongst the parties. Pensions are unnecessarily complicated and often such reports are difficult to understand and may at first appear daunting.
I will summarise these reports for you, demystify the jargon and provide a clear overview and direction on how to proceed based on your individual circumstances.
Second opinions
If you are confused or concerned about any aspect of your finances whilst working with another financial adviser or professional, I am happy to provide a second opinion where necessary to clarify any issues.
Pension transfers
When a settlement is reached it is often necessary to move the pension to a new arrangement. I am able to assist you by advising on the most appropriate type of pension sourced from the whole of the market place.
Financial Planning
It is important to reappraise your finances once your divorce has been finalised and rediscover your values, goals and objectives and what you truly wish to achieve from life. In fact, this can often be first time you are dealing with finances. It needn’t be daunting.
Financial planning can set the framework for you to achieve these goals by providing a sound overall financial strategy which can adapt and change over time as you and your circumstances change.
If you require further information on The Divorce IFA, our services and charging structure, please visit our website www.TheDivorceIFA.co.uk or alternatively, please call us on 01204 663904 or by email on advice@thedivorceifa.co.uk
Tags: Add new tag, Divorce, Divorce Lawyers, Financial Planning, IFA, Pension, Transfer values | Posted in Financial Advice |
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