Delays in pension valuations causing stress and hardship

The decision to divorce is never easy but once a couple have decided to split, dividing their assets so they can both move on with their lives is an important part of the process.

All assets which include savings, property, investments, pensions, employee benefits and high value items such as jewellery, antiques or art, go into what is referred to as the matrimonial pot. These assets are then divided in a fair and just manner to reflect the financial needs, obligations and responsibilities of each party.

The pensions element is a particularly important consideration. Pensions wealth is often held by one half of the couple, usually the male. Many women often agree to forgo pension rights in return for the family home. However, it is increasingly apparent that with little pension provision of their own, many of these women are facing financial hardship in their retirement years.

Recent research on this subject by Manchester University can be found here: https://pure.manchester.ac.uk/ws/portalfiles/portal/198615915/Pensions_and_Divorce_Exploratory_Analysis.pdf

Consequently, it is vital that the value of pensions during the divorce and financial settlement process be considered. A pension valuation is calculated to produce a Cash Equivalent Transfer Valuation (CETV) which is then added to the matrimonial pot before it is decided how the assets are split.

Unfortunately, many financial settlements are currently being held up owing to delays in getting a pension valuation from Teachers’ Pensions – which runs the Teachers’ Pension Scheme on behalf of the Department for Education. This issue has recently been highlighted by the BBC, who estimate around 2,000 teachers are waiting on CETV valuations.

This is adding untold stress to the divorce process as some divorcees are having to wait over a year for a CETV valuation. This is not only having an impact on their mental health but is incurring additional costs because of the protracted divorce process.

More on this story can be found here: https://www.bbc.co.uk/news/articles/cn08nvpl50no

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