Divorce and your Army Pension – a brief guide
Divorce is never easy , but in addition to the emotional pain caused by relationship breakdown, most people going through divorce worry about what will happen to their finances. If you are a serving or retired soldier, and despite your best efforts you’ve come to the conclusion that your marriage is over, you’re probably concerned about what will happen to your military pension.
How much pension will I lose?
The Armed Forces Pension Scheme booklet “Pension Benefits on Divorce and Dissolution of Civil Partnerships” * states that The Court Order could specify a share with your former spouse or civil partner of anything from 1% to 100% of the pension benefits whether by AO, EO or PSO.
Whether you are a serving or retired soldier, your military pension is probably your biggest asset and the most difficult to rebuild – so it’s worth getting expert advice on how to protect it.
Bear in mind that you can give extra funds to your spouse if you want to, so it’s not about being unfair or tight fisted – but your pension is your future
How long was your marriage?
The British Army defines a spouse as “A legally married (including separated, but not divorced) husband or wife. A spouse is entitled to widow’s/widower’s benefits until they are legally divorced, even if they are separated from the member.”
Soldiers often assume that because “there was no need to get divorced” that this period of separation won’t affect their pension on divorce – they are wrong. Courts can take into account co-habitation periods as well as separation periods when calculating the length of your marriage or relationship.
And longer marriages mean an increased chance of a larger payout out of family assets to your ex-spouse.
The value of your pension is what Glasgow say it is?
The independent valuation of your military pension is critical and inaccurate pension valuations are hard to pick up without expert help – and are sadly missed by far too many divorce Solicitors – many of whom don’t understand that there are three quite different military pension schemes AFPS 75, AFPS 05 and AFPS 15.
If you end up with a Pension Sharing Order, your spouse can elect to take this at 65, 60 or 55 – this can make a huge difference to the value.
If you instruct our specialist military divorce team, we will make sure that you get a specialist Actuarial Report on the value of your pension – so that you aren’t paying more than you should [don’t worry – we can arrange that for you].
How do I break up my army pension?
If as part of any divorce settlement, part of your pension is to be paid to your ex, this can be done in two ways – by either
- a Pension Sharing Order or
- an Attachment Order.
Though technical, the difference between these two orders is important.
For example, if you have an Attachment Order, you have to pay tax on the whole of your pension whereas a Pension Sharing Order means that your ex-spouse pays their own tax.
But, If you die or if your spouse remarries, an Attachment Order ends payments to your ex-spouse. Your solicitor will advise you on which option is most advantageous to you and most likely to succeed (Attachment Orders are now very rare) – a combination may be possible.
Valuing your Army pension – timing is important
Promotions affect the valuation process so, if your marriage is definitely over, then take appropriate action in a timely fashion (separation periods may count).
The Army advises that if you are part of the 1975 scheme (closed on 6 April 2005) that: For AFPS 75 Members, the date on which the valuation is prepared is particularly important as, if the value of your benefits is assessed before the Immediate Pension Point (IPP), it will be significantly lower than a valuation made after the IPP. Members of AFPS 75 are entitled to retire with an Immediate Pension after 16 years reckonable service as an Officer or 22 years reckonable service as an Other Rank. This is known as the Immediate Pension Point (IPP). (Source: MMP131).
Going forward to your new life, a new wife or husband’s entitlements to your pension will be reduced by the amount given to your former spouse.
Take action immediately to rebuild your pension when all of the financial agreements are finalised – get a full financial plan in place. If you need an introduction to an independent financial adviser to review your new financial position, just ask one of our team.
Make sure you review your will
This is really important, and given how comparatively cheap a straightforward will actually is, it’s surprising how few people do properly review their will on divorce.
In particular, you need to take extra care with your Will if it still leaves everything to your former spouse – this is especially important to review if you are separated or going through divorce proceedings as this document takes no account of changes until you are legally divorced.
Worried about Divorce and your Army Pension? Contact our specialists now
For FREE phone advice, a FREE first 30 minute first appointment and our exclusive 10% military discount – get in touch with us today.
We can also will arrange a FREE discussion with a financial adviser specialising in army pensions.
- Call us now on  422300 or FREEPHONE 0800 1404544 for FREE initial phone advice or
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* Source : Divorce and Dissolution of Civil Partnerships
MMP/131 Armed Forces Pension Scheme November 2011