Posted by Patrick Hart, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
More retired couples choose to get divorced following new pension freedom rules
More married couples are reportedly getting divorced during the later stages of their lives, following the introduction of new pension freedom rules in April.
The rules mean that anyone aged 55 or over is able to access their pension funds in order to invest the money as they see fit.
Following the changes, many of the financial concerns couples may have had regarding a divorce have been alleviated, primarily because they can split their assets and combined wealth more easily.
Unless a couple’s assets are worth in excess of £1 million, courts across the UK are likely to divide their combined wealth equally, which means that there is often no obligation to sell a family home.
For most couples, a pension is the second largest asset after their home, and in some cases it can be worth more.
Before the new rules were introduced, pension pots were a source of difficulty for couples going through a divorce, as the funds could not be accessed until the age of 65.
However, lawyers across the UK are now witnessing a significant increase in the number of couples seeking a divorce during their retirement, often after being married for decades.
While there are tax implications to consider when more than 25 per cent of a pension’s total value is withdrawn, the greater flexibility for how to apportion assets is a major advantage.
A couple going through a divorce could decide that one partner is to receive the pension pot and savings, while the other could be granted the family home.
Other options include dividing the pension fairly, so each partner has a fair retirement income, and selling the family home so they can split the value and buy smaller properties.
At Royds, our experienced family law department are able to advise on all aspects of the divorce process. We will work closely with clients to achieve the best possible outcome. For more information, please visit or contact Patrick Hart or Vandana Chitroda.
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