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Question:

 

My wife and I have been married for some 24 years, although we are still only in our 40s. We have both worked throughout the marriage, although because my wife interrupted her career to have the children, I have made much more money than she has over the years and, as a result, the family, as a whole, is wealthy and we have very significant capital savings as well as assets.

I have been told that these must be divided equally and I do not object to this, but although my wife has a pension, it is considerably less than my own. She is saying that it would not suit her to have a pension-sharing order to equalise the value of our respective pension funds and she is saying she would rather take extra capital.
Again, I do not mind this particularly, but she is asking me for enough capital to buy her the sort of pension that she could have if she took a slice of my pension and the resulting lump sum is exorbitant.  It is so high that it would make a significant inroad into the capital that I am keeping and give her considerably more capital than she could possibly need.
 

This strikes me as completely unfair as, if the Court agrees with her, she will have extra money that she can use and spend, whereas I will simply have a pension fund, which I cannot draw down except at a penal tax rate, and which, in any event, is going to be variable.

 

Is there any alternative way of keeping my pension but not giving my wife quite so much money?

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Answer:

 

There really seems absolutely no point in your wife refusing to take a pension share if she in fact wants to buy annuity that matches the pension share she would be able to take from your pension, and you are saying that you do not mind this.

 

On the other hand if she takes capital now in place of a pension share a Court would suggest that she should not take as much capital as is the apparent capital value of her pension share as she will have the use of that capital now and she will have it as a lump sum whereas a pension share can only be taken when the party taking it reaches pensionable age and then can only take 25% of the value of the pension tax free with the rest being paid as an annuity.

 

Your wife’s approach is illogical and very unlikely to find support from the Court. I suggest you find out why your wife particularly wants capital and if it is in order to buy a pension, she should take a pension share. If not the question of the reasonableness of her request should be taken into account and in any event you own foreseeable needs are also a very significant question and these must be met by the available capital as far as possible.

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Barbara Jordan