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Divorcees could benefit from undervalued pensions

One in 25 divorced men and women in London may have missed out on thousands of pounds if their ex-partners’ pensions were undervalued during their divorce settlement, according to a specialist divorce and pension consultancy.

20 July 2012

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Divorce LifeLine estimates that up to half of the 1.5m divorces that have taken place in the UK since December 2000 may not have had their pensions professionally valued by a financial expert. It is possible that many of those people are entitled to more money, even though their divorces have been settled, says the consultancy.

“Pensions are complex financial assets and calculating their true value for a divorce settlement is difficult,” said Tony Derbyshire, founder and partner at Divorce LifeLine. “What we have discovered in 96 per cent of the divorce settlements we have looked at is that divorce lawyers have not commissioned the expert advice of an independent financial advisor (IFA) or actuary to get an accurate valuation of the pension. In such a situation it is possible that the valuation was wrong, leaving thousands of people out of pocket.”

Since a change in the law in December 2000, pension sharing has become allowed. This means a pension provider can be told that a percentage of the pension of their member can be allocated to the member’s former spouse following a divorce.

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Family Pensions