The credit crunch has of course affected many things but it has certainly hit pension funds very hard indeed.
This worries a lot of people when looking at their retirement but it also has a very significant effect upon divorce financial settlements. For example a wife, married for 30 years, may reasonably have been expecting to share in her husband’s pension. The relationship breaks down and she pursues a divorce. But it turns out his pension is now worth a lot less than she thought perhaps due to the credit crunch. Resolving issues of pensions and divorce is even more difficult than normal.
Can she obtain enough share of the pension to enable her own retirement?
Should she wait for the credit crunch to end before divorcing or at least before finalising the divorce settlement?
Has he provided pension information and valuation that is accurate?
Will the pension value shoot up in soon to be (we hope!) good financial conditions?
These are all issues that are important in any divorce in any economic conditions but brought into sharp focus by the credit crunch. Advice from a specialist divorce lawyer is essential. They will normally want to involve a specialist pensions IFA or chartered planner.
(By the way, pension valuations provided by the owner of the pension are, apparently, almost always understated---do not accept them on face value. Take advice).
Andrew Woolley
Specialist divorce lawyer.