Will my Divorce Affect my State Pension?
- AuthorMikaela Rogerson
The short answer to this question is a resounding ‘yes’. Unfortunately this is an issue which is frequently overlooked when couples are getting divorced, usually to one party’s disadvantage.
The current age at which women can claim their state pension is 65. The age at which both men and women can claim their state pension will increase to 66 from 2020, and this is set to increase further to 67 between 2026 and 2028.
Following a change in the rules in April 2016, anyone claiming a state pension after that date, must have paid a minimum of ten years National Insurance contributions, up to a maximum of 35 years. Thirty five years’ worth of contributions will at present (Nov 2018) provide a state pension of £164 per week. If you’ve paid in less than 10 years contributions then your state pension is reduced proportionally.
To find out how much basic state pension you may receive on retirement, you can submit form BR19 to www.gov.uk together with form BR20 to find out about any additional state pension you may be entitled to. The Pensions Service will reply within 10 days giving you a personal state pension forecast. If you are getting divorced apply for your forecast as soon as possible and give it to your solicitor.
In some families however, where one spouse has worked for shorter periods than the other, perhaps looking after elderly relatives or children, or due to ill health, there may be an imbalance between the couple when it comes to the amount of state pension each will receive.
It used to be the case that the spouse with the lower National Insurance contributions could request that their ex-spouse's contributions be taken into account to boost their own state pension income (without affecting their ex-spouse's income). This was particularly helpful and allowed the parties to equalise their income in this way, however, this option is no longer available for parties who reach state pension age after April 2016 and divorce after this date.
Any difference between a couples' state pension income on retirement should therefore be taken into account when looking at a financial settlement in divorce. This can be done by obtaining a state pension forecast (using forms BR19 and BR20) and, if appropriate, securing a pension sharing order (an order requiring one party to pay a percentage of their pension to the other) to address any inequalities in income.
State pensions cannot be shared and so any order will be made against any other pension provision the relevant party has. It may seem like a small point, but sometimes the discrepancy in state pension entitlement can really put one party at a disadvantage. Make sure it’s not you.
Consequently, if you are divorcing, apply for your state pension forecast so that your solicitor has the information they need to ensure you have enough income when you retire.
For more information please contact Mikaela Rogerson on (01636) 593 514 or firstname.lastname@example.org
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