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How to protect your pension after divorce – everything you need to know

How to protect your pension after divorce – everything you need to know

Scottish Sun31-05-2025
SPLITTING UP How to protect your pension after divorce – everything you need to know
DIVORCE is one of the most stressful experiences you can go through in life, not least because of the debate over how to split your finances.
While the family home is often given careful consideration, pensions are a vital factor often overlooked.
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But this can have severe consequences later down the line.
Pension savings can be worth hundreds of thousands of pounds, yet, all too often these cash pots get ignored when it comes to divorce, and it's usually women who miss out.
Their pension pots are often smaller than men's due to taking career breaks to look after children or working part-time.
The oversight costs women more than £77,000 on average when it comes to retirement, according to research by provider Scottish Widows.
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Yet, more than more than 60% of divorced women didn't go through pension assets during a divorce.
Susan Hope from Scottish Widows, says: 'The main reason women still lose out is because they simply are not aware of the potential value and that pensions should be included in the family assets.
'Divorce can be an extremely stressful and intense time. It can be easy for pensions to sink down to the bottom of the priorities, especially if it's a DIY divorce.
She added: "Some may prioritise keeping the family home or taking more cash from a sale, but without seeing the full picture..
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"This could be at the expense of a fair pension share, so it's important to have the right conversations.'
Could you be eligible for Pension Credit?
HOW TO DIVIDE A PENSION
There are a few different ways to split a pension.
It is important to note the value of the pension may be offset against other assets.
For example, one person could agree to take a bigger share of the home instead of any of the other person's retirement pot.
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Or the pension could be shared with an agreed percentage transferred to the former spouse.
In this case, it's a clean break, according to Dean Butler of pension firm Standard Life.
He adds: 'On the downside, it can be quite complicated to set up and needs an order from the court.'
Another alternative is called a 'pension attachment order', which is where one person agrees to pay a portion of their pension income to the other, but only when it starts being paid.
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Dean says: 'This also requires a court order and the first person retains quite a lot of control of when and how the pension is used, and payments will stop when they die.'
WHAT TO DO WITH CASH
After a divorce, you should always take stock of how much you'll need for retirement and whether you have enough.
Rachel Vahey, head of public policy at AJ Bell, said:'You may find the income you expected to get at retirement has taken a hit.
'Whether your ex-partner kept the bigger proportion of the pension or you shared some of your retirement savings with them, now is the time to think about how to boost your pot.'
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You can go through a three-step online pension check on the government's website nestpensions.org.uk to check if you are on the right track for a comfortable retirement.
If you are falling short, look at what your employer can offer.
It could be worth upping contributions through a workplace scheme, especially if your employer will match the contribution.
Even increasing savings by a small amount can make a big difference in the long term.
If you do receive a share of a pension pot, you'll need to think about whether it's in the right place.
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You could save fees by combining it with any other pensions.
Having your cash in a single and bigger pot also makes it easier to manage.
CHANGE YOUR EXPRESSION OF WISHES
Many people don't realise that pension assets are not usually covered by your will.
And if you die before taking a private pension, your provider will then decide where the cash goes.
This is usually done based on an 'expression of wishes'. This is a form you'll usually fill out when setting up the savings pot.
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Crucially, if you gave your spouse's name when you set up the account, you need to remember to change this when you divorce – assuming you no longer want them to receive the benefits.
Ed Monk, associate director at savings provider Fidelity International said: 'If your life circumstances change and you're seriously considering ending your marriage or civil partnership..
"It's important to change your expression of wish to reflect any change in who you want to receive your pension payments in the event of your death.'
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We explain the best tips so you don't loose out when you go through a divorce
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'I would definitely be worse off'
By Lana Clements
TRACEY Ford, 51, was married for 14 years and initially didn't consider her ex-husband's pensions as part of joint assets.
The celebrant from Johnstone, Renfrewshire was mainly focussed on how to take over ownership of the house, when she decided to consult a solicitor on the situation.
It was only then that she was made aware that she would be due a portion of his civil service final salary pension.
She says: 'I had been self-employed for 25 years so didn't have a workplace pension.
'My ex-husband's pension was a sizable asset that I had completely overlooked until the solicitor pointed it out.
'We then went through a process to set up the appropriate paperwork so I'll receive a portion in the future.
'I would definitely be worse off in retirement had I not taken the pension into account.'
Nationwide £100 payout
MILLIONS of Nationwide customers are to receive a £100 cash sum over the coming weeks.
Around four million will receive a share of £410million as part of Nationwide's Fairer Share programme, which rewards its banking customers.
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Millions of Nationwide customers are to receive a £100 cash sum over the coming weeks
Credit: Getty
You will need to have opened a current account with Nationwide before March 31.
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Those with £100 in savings at that time will also see the boon if the account was used within the first three months of this year.
And Nationwide mortgage borrowers with more than £100 outstanding qualify, too.
The cash will be paid into Nationwide current accounts between June 18 and July 4.
Chief executive Debbie Crosbie said: 'Nationwide has had an outstanding 12 months.
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"We returned a record £2.8billion in value to our members and recorded our highest ever year for growth in mortgage lending and retail deposit balances, and we remain first for customer service.'
It comes after Nationwide paid £50 to customers in April and May as part of its 'Big Nationwide Thank You' following the building society's Virgin Money takeover.
Those who have been Nationwide members since March 31 can currently get a £200 bonus by switching to Nationwide's FlexPlus, FlexDirect or FlexAccount.
An existing member is someone who has held a mortgage, savings account or current account with the company.
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Cash boost for retired
CHANCELLOR Rachel Reeves has announced plans to overhaul the UK pension system, aiming to increase average retiree savings by £6,000.
The reforms, part of the forthcoming Pension Schemes Bill, involve consolidating smaller defined-contribution pension schemes into larger 'megafunds'.
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Labour chancellor Rachel Reeves is set to overhaul the UK pension system
Credit: Getty
Assets will be pooled from the 86 separate Local Government Pension Scheme authorities into eight funds by 2030.
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The Government draws inspiration from successful models in Canada and Australia, where large-scale pension funds have achieved higher returns through diversified investments.
By pooling assets, the UK aims to enhance investment opportunities and stimulate economic growth.
Each megafund will set specific targets for local investment, potentially securing £20billion for community development.
While the reforms promise increased returns and economic benefits, experts warn that the consolidation could overlook the advantages of smaller, well-managed schemes.
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The Government plans to introduce the Pension Schemes Bill next year, with further consultations to make sure the reforms meet the needs of savers and the economy.
The Government says this is a significant shift in the UK's pension landscape, aiming to balance individual retirement savings with broader economic objectives.
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New calls for national strategy to tackle pensioner poverty and set minimum retirement income
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New calls for national strategy to tackle pensioner poverty and set minimum retirement income

The Work and Pensions Committee is also calling for a Pension Credit take-up strategy by the end of this year. Pension Credit – Could you or someone you know be eligible? The Work and Pensions Committee has called for a national strategy to tackle pensioner poverty. The cross-party groups of MPs also said the UK Government should decide on - and ensure - a minimum level of retirement income. It added that once set, a plan should be created for everyone to reach that level. The Committee said that given that the State Pension is the core of the Labour Government's offer to pensioners, a guiding principle should be that it provides the amount needed for a 'minimum, dignified, socially acceptable standard of living'. It called for a commitment to a UK-wide, cross-government strategy for an ageing society that it said would help target support to tackle pensioner poverty. 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A successful claim for Pension Credit - even if it's just £1 per week - can unlock access to other support including help with housing costs, heating bills, Council Tax and a free TV licence for the over-75s. How to check eligibility for Pension Credit Older people, or friends and family, can quickly check their eligibility and get an estimate of what they may receive by using the online Pension Credit calculator on here. Alternatively, pensioners can contact the Pension Credit helpline directly to make a claim on 0800 99 1234 - lines are open 8am to 6pm, Monday to Friday. The Committee argued that reliance on top-ups such as Pension Credit and Housing Benefit is not sufficient to ensure people do not fall below the poverty line. The report said: 'After a decline in pensioner poverty in the 2000s, the number of pensioners in relative low income started to rise again from 2010. This has been exacerbated by increases in the cost of living since 2021.' It continued: 'The number of people of pension age living in relative poverty (below 60% of median income) is 1.9 million or 16 per cent of pensioners. 'Measures which factor in the cost of living show that between 2008/09 and 2022/23, the number of pensioners in households below the Minimum Income Standard (MIS) - the amount needed for a minimum dignified socially acceptable standard of living - rose from 1.5 to 2.8m. 'The proportion of pensioners below 75 per cent of MIS (where the risk of material deprivation increases substantially) rose from 5.9 per cent in 2021/22 to 9.5 per cent in 2022/23. 'In practice, this means cutting back on essentials, like food, energy use and seeing friends, in an attempt to manage costs. Health experts explained the implications for health. Financial hardship can accelerate the ageing process, making it more likely that an older person will enter hospital or need care.' 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Can I transfer £60,000 into a cash Isa from a stocks and shares Isa?
Can I transfer £60,000 into a cash Isa from a stocks and shares Isa?

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time7 hours ago

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Can I transfer £60,000 into a cash Isa from a stocks and shares Isa?

Can you move more than £20,000 into a cash Isa from a stocks and shares Isa? I want to make a £60,000 transfer and in theory I think this should be feasible, as long as I don't withdraw the money outside of an Isa wrapper in between. However, I don't seem to be able to find any information to confirm this. I'm yet to find a cash Isa that states its limit as over £20,000 per year. Does this mean that although it's hypothetically possible, in reality it's not, or would a provider accept a transfer above the annual allowance? Helen Kirrane of This is Money replies: At the beginning of each tax year, savers get a fresh Isa allowance. This means it is possible to put up to £20,000 into either savings or stocks and shares, while shielding interest, dividends or capital gains from tax. There is a difference between the amount of new money you can put into an Isa in a given tax year, and the amount of money you can transfer from an old Isa into a new Isa you open. You can transfer money between Isas to consolidate savings into one pot without needing to worry about the £20,000 annual allowance. Transferring funds between Isas won't count towards this allowance, as the £20,000 limit only applies to money paid in from outside an Isa. To get some expert advice on your question, we spoke to Laura Suter, director of personal finance at stockbroker AJ Bell, and Sarah Coles, head of personal finance at stockbroker Hargreaves Lansdown. Laura Suter replies: I can see the confusion here. The key point is: Isa transfers don't count towards your £20,000 annual limit, as long as the funds stay within the Isa system. That means you're transferring directly from one Isa provider to another using the official transfer process - and not withdrawing the money yourself). That means you're transferring directly from one Isa provider to another using the official transfer process - and not withdrawing the money yourself. So, if you have £60,000 in a stocks and shares Isa and want to move it all to a cash Isa, that's entirely possible - provided the cash Isa provider accepts transfers in. Most do, but some may have restrictions or not highlight it clearly on their websites. What you should do is check with your chosen cash Isa provider to confirm they accept transfers in, and then initiate the transfer through them - not by withdrawing and redepositing the money. That way, your Isa status and tax-free benefits remain fully intact. Sarah Coles replies: There are several cash Isa providers allowing transfers in from a stocks and shares Isa. At the time of writing, the most competitive easy-access cash Isa, and the best over two and five years allow it. In the one-year and three-year market, you can transfer into one of the top three accounts from a stocks and shares Isa. The transfer doesn't use any part of this year's £20,000 allowance, so the norm is to allow you to transfer as much as you like. Some will have a maximum on the cash Isa funds you can hold with them, but this tends to be a pretty hefty amount – often hundreds of thousands of pounds. You will usually not want to hold more than £85,000 with each institution anyway, so it's all protected by the Financial Services Compensation Scheme. Once you find the best rate for you, check they allow for stocks and shares transfers in. The FAQs on the website will let you know about any limits.

7 of the most overlooked ways over-60s can cut weekly bills
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These tips could uncover hidden help and ease the squeeze if you're struggling with costs 🧾 Sign up to the weekly Cost Of Living newsletter. Saving tips, deals and money hacks. Sign up Thank you for signing up! Did you know with a Digital Subscription to Edinburgh News, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Many over-60s are unaware of support that could ease weekly financial pressure Forgotten schemes and habits can add up to big annual savings A few simple checks may reveal hidden entitlements Small changes can make a noticeable difference to everyday costs This guide highlights often-missed ways to reduce outgoings later in life With the cost of living still biting hard, older people across the UK are increasingly looking for ways to cut costs and ease the pressure on their weekly outgoings. 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