Ferdinand Lovett considers the potential impact of the recent Budget changes on pensions on divorce
Courts dealing with divorce settlements have historically treated the pension rights of either divorcing party differently from other assets, such as savings, shares or property. For the time being, this makes sense: pension rights are, in most cases, illiquid assets in comparison to other forms of property. They are used to obtain a stable future income stream rather than cash for the here and now.
But will this all change from April 2015, if the proposed liberalisation of the rules governing access to defined contribution (DC) pension savings hit the statute books in substantially the same shape as set out in the 2014 Budget? Certainly, the recent Queen’s Speech indicates this is still the plan (“Legislation will be brought forward to give those who have saved discretion over the use of their retirement funds.”)
Broadly, it is proposed that everyone will have the flexibility to take their DC benefits from age 55 “whenever and however they wish”, regardless of their total DC pension savings. This will mean that individuals
