I have £500k in a defined benefit pension scheme and need to transfer out to settle a divorce and save my house?
14 December 2021
Question by Jane
I am in an awful quandary - please help! I have £500k in a defined benefit pension scheme and need to transfer out to settle a divorce and save my house?
Answered by Boring Money
Thank you for your question.
There are other options to transferring out a defined benefit pensions scheme to settle a divorce, for example, a court order or pension sharing order could be used to help keep some of the often highly valuable guarantees within the pension, but if required, still providing some value to the ex-partner to help with the divorce.
Depending upon your income and any outstanding mortgage on the house, it may be possible to look at obtaining a small mortgage to retain the house if you did not want to sell.
Divorce and finances require careful consideration of all of the benefits, it would be best to speak to your solicitor to consider financial meditation and a financial separation order, to make sure you don't lose out and to help ensure finances are split, so there can be no come back on your in any future year.
Please do not rush into any decisions and take your time to consider any potential implications. This is what an appropriately qualified financial planner who uses cashflow planning should be able to help you with.