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Sometimes it pays to sweat the small stuff?

05/05/2017

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If you're like most people going through a divorce, you'll be focusing on the big issues. But there are also several other issues that can be missed.

If you’re like most people going through a divorce you’ll be focusing on the big issues; where am I going to live, what about the kids, who is going to pay for stuff, what do we do with pensions and so on.  Big issues that need a lot of attention.  But, there are also several other issues that can be missed that may look less important on the surface but can have a big impact if not now, then in the future.  So, here’s a few things to watch out for.

Pensions

Make sure you know who’s got what and what it’s worth. It’s not just the pension but other benefits that you could’ve shared had you stayed together such as life assurance and a tax free lump sum.  You can read our guide to pension sharing here.

Property

If one of you is keeping the home you need to think about the mortgage; will the bank or building society allow one of you to take on the mortgage, can you afford it?

Will one of you keep a financial interest in the home and what will the conditions be?  This is often done if there aren’t enough other assets for a financial settlement (it’s called a Mesher Order) but could mean that the property has to be sold when the children are 18 for example.

If the divorce is finalised and the property sold more than 18 months after one of you left, there could be a capital gains tax bill to pay. If you’re worried about this you should speak to an accountant.

Job perks

Did you enjoy your ex’s perks from their job such as subsidised child care, gym membership, housing allowance etc and what will it mean to you to lose them?

Life assurance & other protection

Most couples with a mortgage have a joint life assurance policy to pay off the loan if one of them dies.  How will you deal with this now?  There may also be other policies held in joint names that you need to think about.

You might want to think about setting up new life assurance or health insurance on your ex after the divorce.  This is important if your ex will be paying maintenance or school fees; what would happen if he or she died or was ill and couldn’t work?

State benefits

Will any benefits you currently get be affected by the divorce?

Will you be able to claim additional benefits such as Working Tax Credits and Child Tax Credits?

Who will the Child Benefit be paid to?

Can you boost your State Pension by using your ex’s National Insurance record?

We’re sorry to throw all of this into the mix, at a time when you already have a lot on your plate. If you need some help, see if you can find a local financial adviser who will see you for an hour or two to take all of your questions. If so, go prepared with a list of questions and have a summary of your financial position ready. You can find a good financial adviser for about £150 – £200 an hour depending on where you live. That can sound like an expensive few hours but they might save you thousands in the long-run?

If you do want to look for a financial adviser we suggest you check out Vouched For. And if it all feels too awful today, then you could always treat yourself to a nice take-away with a glass of wine and pick up the fight again tomorrow!? Good luck.

For more information on divorce, visit our distressed divorcer Learning Path.

Join your money tribe

In the throes of a divorce, or just weighing up the options, this stuff is never fun. But we'll try and make it as painless as possible. 

Distressed Divorced

Related Questions

Got a Question?

  • I am self employed (40) with no private pension, earning £50,000 a year. I have savings and can make a lump sum investment. I know nothing about Stocks or Shares. What is the best way forward for pension and tax reduction? Desperate Anna

    Anna | London | 25/03/2019 | 0

    • Private Pension
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    Holly Mackay's Response

  • My pension SIPP has an annual charge of about 2%. Now that I am in monthly drawdown, I'm interested in exploring alternative providers to lessen the charges, since future returns look like being lower than they have been in the past.

    Michael | London | 25/03/2019 | 0

    • Private Pension
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  • When I retired in December 2018, I considered consolidating my pensions for income drawdown, but it meant handing over management of the investments. After viewing the performance of the funds the Standard Life Active Retirement pension invests in, I hesitated. Recently I spoke to an advisers aligned to the investment philosophy of Albion Strategic Consulting headed by Tim Hale, but was scared off again by the messages regarding DIY investor dealing with re-balancing, sequencing, and lack of ability to stress test without the correct professional financial software, in addition to the high costs. I understand the basics, but am now totally unsettled as to the direction I should take and if, at such a critical stage, I should invest in an IFA on a regular basis. I appreciate you cannot give me direct financial advise but I am finding the whole event very disconcerting, when I thought I had the basic acumen to manage the transition.

    Rob | Hertfordshire | 20/03/2019 | 1

    • Private Pension
    • Pension
    Holly Mackay's Response

  • My 60 year old mum is not very financially literate and has has no private pension. She has approximately £900k to invest, from which she will need to draw down c.£40k a year for life. She is not very financially literate and would not be able to proactively manage the money herself. Would you favour an Independent Financial Adviser or a Robo Adviser for someone in her position? Thank you!

    Harry | Kent | 11/03/2019 | 1

    • Private Pension
    • Robo Adviser
    • Online Investment Platforms
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  • My son has a work-based pension which he contributes 3% to, matched by 3% from his employer. He has nearly 10k with Nutmeg, 4K + in a Lifetime ISA, the rest in an ISA. If he increases his pension contribution, I have read it may affect the amount he can borrow on a mortgage. Is this correct? Should he take a SIPP out as well? Is there any advantage in maxing out his managed Nutmeg Lifetime ISA in the next financial year?

    Richard | Hertfordshire | 06/03/2019 | 3

    • Private Pension
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  • I am 65 and still working. I have a workplace pension, which was closed and replaced with a retirement saver pension. I contribute to this via salary sacrifice. I also have a personal pension serviced by an IFA. Should I move my personal pension fund to a SIPP provider at this late stage of my life? I would like to consolidate the workplace retirement saver and personal pension fund together and manage it myself.

    Den | South Yorkshire | 27/02/2019 | 0

    • Private Pension
    • Pension
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    Helena Wardle's Response

  • Trying to get a bit more pro-active with my pension. If my money had been in an online managed fund like Nutmeg for example, is it reasonable to assume that as the markets fell last year the funds would have been managed in real(ish) time to limit the damage? If so, is it therefore a no-brainer to transfer my pension to an online managed pension or is it not quite as simple as that?

    David | London | 08/02/2019 | 2

    • Private Pension
    • Robo Adviser
    • Pension
    Lesley James's Response

  • With a SIPP in drawdown would a company like Netwealth whose investment management fees are of the order of .66% of the value of the portfolio, be a better option compared to companies like Hargreaves Lansdown or Investec? What are the relative benefits of Netwealth over the more traditional wealth managers?

    Steve | Lancashire | 22/01/2019 | 6

    • Private Pension
    • Robo Adviser
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  • From my retirement I received a lump sum of money and a monthly pension. I have £100,000 that I do not need for the foreseeable future... One of my main concerns with Financial Advisers are their costs... All I want is simply to see this money grow to its potential, sensibly and above inflation... Therefore my next thoughts are Stocks and Shares ISAs... My only concerns here are the current Brexit problems - I saw the FTSE drop this past week. I cannot find any information out there to assist with my decision making if this is certainly a good time to invest... I am aware that I can place £20,000 for this year. Come April 2019 I place another £20,000 and so on until the £100,000 has been utilised. Do I have to place it into the same fund or can I choose another different fund with a different company?... Please can you help to ease some of this burden, which has proved an awful part of my retirement and made me frightened to spend any money.

    Katherine | Derbyshire | 02/01/2019 | 0

    • Private Pension
    • Stocks and Shares ISA
    • Cash
    • Robo Adviser
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    Helena Wardle's Response

  • I was lucky enough to inherit a significant sum from my father... currently in Alliance trust platform in 10 investment trusts. They have delivered well in the last 20 years. But they are UK equity based. And highly risky. Do you offer a sanity check service for confused individuals like myself? I don’t know what to do...

    Paul | Berkshire | 12/11/2018 | 2

    • Private Pension
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  • I am a 30 year old British expat living and working in the Netherlands. I worked in the UK for 5 years but to my knowledge I did not have a work pension of any sort. I've been working in the Netherlands for the last 4 years, and again have no pension (my company does not provide anything). I'm getting increasingly worried about my future retirement and my lack of any kind of pension. Firstly, I am not sure what - if any - state pension I could receive (either from UK or Netherlands) but I assume not much. Secondly, I'm ready to start investing on a monthly basis into a private pension fund, but I have no idea what the best option for me would be. Really lost and confused, and would really appreciate any advice you might have.

    Lucinda | Kent | 09/10/2018 | 0

    • Private Pension
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    David Stone's Response

  • My wife, 56, is still working but has a final salary scheme which she is drawing as well - currently £26k per annum. Her current employer's pension scheme is defined contribution, and her fund stands at £1.050m. Therefore, her total pension is around £1.57m. We protected her Lifetime Allowance at £1.25m, but all growth will now be taxed at the excess rate. My idea is to take the 25% tax free amount out of the defined contribution pot, and reinvest it in the same funds as the pension. This will then remove growth on the 25% from the excess tax rate to a capital gain when sold, thereby saving a considerable amount of tax. Am I right?

    Rod | Hampshire | 05/09/2018 | 1

    • Private Pension
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    Danny Cox's Response

  • Can you advise me on the best approach when looking to invest in a product that offers compound interest? I’m thinking about funds rather than bank accounts. I also have 4 different pensions on the go. Should I keep them separate to diversify the risk? Or consolidate them? How will these pensions be treated when I retire? Will they be considered in aggregate by the tax man?

    Craig | Clackmannanshire | 16/08/2018 | 1

    • Private Pension
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    Helena Wardle's Response

  • I have about two thirds of my ISA in funds with Charles Stanley Direct and about one third left with St James's Place. I was planning to transfer the remaining one third to Charles Stanley Direct. However the recent platform price increases seem to put me in the worst position possible. I also have a private St James's Place pension. Would I be correct in thinking the fees are also high on this, and I could do better elsewhere? Can I transfer into an SIPP for example?

    Gerry | Bedfordshire | 15/08/2018 | 5

    • Private Pension
    • Online Investment Platforms
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    Holly Mackay's Response

  • I'm nearly 30 and looking to open a private ready made pension, and also an investment ISA for retirement funds or towards a property, but very unsure what risk level to choose (low to medium, or medium to high)? Any comments or advice welcome.

    Susan | WMD | 24/07/2018 | 1

    • Private Pension
    • Stocks and Shares ISA
    Cherry Reynard's Response

  • My wife needs to set up a SIPP with a good value, low cost, low maintenance underlying investment portfolio. We want a good mobile app from a well respected provider. Where can we see the options and directly compare historic returns so we can make a decision?

    Guy | HRT | 17/07/2018 | 1

    • Private Pension
    • Pension
    Richard Allum, MD, The Paraplanners's Response

  • I hope you can help. I recently consolidated two modest pensions into a SIPP in readiness to start UPFLS drawdown in May (2018). Whilst I was hoping for growth in my investments I wasn’t expecting it to rocket and now find I could well be looking at exceeding the lifetime allowance, possibly even before my first annual drawdown in May, and I’m unsure what, if anything, I should do.

    John | LDN | 03/07/2018 | 1

    • Private Pension
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    Richard Allum, MD of The Paraplanners's Response

  • Hello Are there any specific pensions you would recommend, with low charges, which I can set up for my 11 yr old son. I am already paying the maximum into a junior isa. AH

    Anita | SXW | 18/06/2018 | 3

    • Private Pension
    • Junior ISA
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  • I am a 59 yr old retired lady with no income but I have reasonable equity..is it worth starting a pension or is it too late?

    | 06/02/2018 | 2

    • Private Pension
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    Boring Money's Response

  • I am in the very lucky position of just having received a gift of £800k which I want to invest for our retirement. My husband and I are in our late 40s and aim to retire in around five years. We have 11 more years of school fees to fund, then hopefully university fees for two after that. I've put together a plan for us - can you have a look and see if it makes sense?

    Fiona | UK | 18/01/2018 | 6

    • Private Pension
    • Stocks and Shares ISA
    • Junior ISA
    • Shares
    • Cash
    • Online Investment Platforms
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  • Can losses in a pension SIPP be offset against anything?

    Henryk | HAM | 17/01/2018 | 0

    • Private Pension
    • Pension
    Cherry Reynard's Response

  • I am already receiving a pension from a final salary scheme and I am retired. I have a sum of money I want to invest. Can I start another pension as a saver and, if so, how much can I put in every year?

    Collette | Greater London | 25/11/2017 | 0

    • Private Pension
    • Online Investment Platforms
    Danny Cox's Response

  • I am a 59 yr old retired lady with no income but I have reasonable equity..is it worth starting a pension or is it too late?

    LL | NFK | 10/11/2017 | 2

    • Private Pension
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  • I am getting long in the tooth at 79, a little forgetful and I am going through a painful divorce. This has shattered my confidence and I need help.

    Richard | Kent | 05/11/2017 | 3

    • Private Pension
    • Funds
    Holly Mackay's Response

  • Please help me. Choosing a pension from Aviva. It asks if I want growth or income? Which one do I choose ? I'm 46 .

    Ria | Greater London | 11/09/2017 | 8

    • Private Pension
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  • Is it worth using a financial adviser when it comes to switching pensions funds, or should I do the research and pick the funds myself? I am no expert in stocks and shares.

    Helen | Dorset | 10/08/2018 | 4

    • Private Pension
    • Shares
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  • I've got £20,000 from an endowment policy (astonishing, I know), and I'm looking into how best to invest to get a reasonable return without excessive risk. Any thoughts much appreciated!!

    Penny | Peterborough | 09/08/2018 | 1

    • Stocks and Shares ISA
    • Cash
    • Online Investment Platforms
    • Life Insurance
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  • Why should I bother with paying into a pension at my age of 55 years now when I have never had one?

    Tee | Greater London | 07/09/2017 | 4

    • Private Pension
    • Pension
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  • Which is better - property or pension?

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    • Private Pension
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    Femi | Greater London | 07/09/2017 | 0

    • Life Insurance
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    Abigail | Greater London | 06/09/2017 | 0

    • State Pension
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  • How much does life insurance cost?

    Christina | Greater London | 06/09/2017 | 0

    • Life Insurance
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  • What are the changes with pension annuities? My mother in law has asked as her retirement is looming. I've read in the press it's changing but it all feels confusing. I just need some simple clear advice. Thanks

    Keith | Greater London | 06/09/2017 | 2

    • Private Pension
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