Financial Planning and Divorce
No-one who is going
through a divorce finds the process easy: it’s long, messy and almost always painful. Even if there are no children involved, divorce is a procedure that takes its toll on both sides: the acrimony, the paperwork – and the inevitable meetings with your solicitor.
It’s understandable that many people involved in a divorce want to minimise the number of meetings they attend and simply let the solicitors get on with sorting it out.
Unfortunately, trying to cut down on meetings could be a serious mistake. Divorces are not just about broken relationships, dividing up the family home and arranging custody of the children. Sadly, they’re about financial planning as well – and meetings with your independent financial adviser may turn out to be even more important than meetings with your solicitor.
Even if a couple have only been married for a relatively short time their financial affairs are likely to be inextricably linked. The mortgage will almost certainly be in joint names; they could well have shared protection policies and pension benefits may need taking into account when assets are divided.
Couples who have been together for longer – and an increasing number of people are now getting divorced in later life – will find the financial situation even more complex. Pensions will certainly be an area that requires specialist financial advice as some people, particularly high-earners in final salary pension schemes, will have built up pension funds which could well be worth more than the family home.
The new rules on pensions sharing in divorce have introduced a variety of options when it comes to dividing accumulated pension funds: they have also introduced the need for some seriously complicated (and potentially contentious) calculations, making expert advice absolutely essential.
All these areas mean independent financial advice can be crucial to making sure that any financial ‘damage’ you suffer as a result of a divorce is kept to a minimum, and that you emerge with a clear idea of the financial planning steps you need to take in the aftermath of the divorce.
Virtually no-one relishes going through divorce proceedings, but if you find yourself in that position, seeking out independent financial advice will be one of the wisest decisions you make. A good IFA will help make sure that you receive the best possible financial ‘result’ from the divorce and will work with your solicitor to see that everything runs as smoothly and painlessly as possible. Whether it’s helping to sort out the mortgage, reaching an equitable settlement of pension assets or any of the other complications that a divorce can throw up, an IFA will be on your side, constantly giving advice with your best interests at heart.
If you are – or fear that you might become – involved in divorce proceedings then please don’t hesitate to contact us. We’ll provide you with expert and wholly confidential advice – and do our best to make sure that the financial pain of your divorce is kept to an absolute minimum.
Steve Clark
If you haven’t started your pension project – start here!
We don’t need to remind you that the biggest pension change in a generation is almost upon us. The biggest employers in the UK have to start enrolling all their employees in a pension from October.
The supermarkets are probably the biggest employers in this group. So from October there’s a good chance that the checkout lady that asks you if you want help with your packing will have automatically joined the pension scheme.
Smaller employers have a bit more time. On the fact it many will have a couple of years or so to comply. But in real terms it’s only two year ends and two pay reviews. Time soon passes.
If you haven’t worked out when you have to comply then you really need to start looking at it now. The first stage is to work out how many employees you have as that dictates when you need to comply.
There’s plenty of guidance on The Pensions Regulator’s web site. You can get to it by clicking here. 
The all round good eggs at the law firm DLA Piper have also published the first in a series of updates on the new pension rules. The first one is all about assessing exactly who your workforce are for the new rules. You can read the update by clicking here.
If you’re ready to start your project and you need some guidance and support 44 Financial would be delighted to help. You can contact us here to arrange an initial consultation – at our expense.
Steve Clark
Director
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A Gender for Change – why women must pay more!
We’ve written in the past about the fact that the EU has outlawed the sale of financial products where the cost for the same cover differs between men and women. If you want a quick catch up you can click through to our previous post here.
The biggest issue for women of all ages is that the price of Life Assurance, Critical Illness and Income Protection Cover is likely to go up. The crucial date when everything must change is 21 December 2012.
However, things are beginning to happen already. One of the biggest providers in the market, Scottish Provident, recently announced it has repriced some of its life insurance products for women.
Scottish Provident has calculated that women will face an increase of up to 15% for life insurance as prices equalise and women start to pay the same price as men. This is likely to be the same story when looking at Critical Illness and Income Protection Cover.
Any women out there who are looking to put in place new or increased cover – perhaps as a result of having a baby or moving home – should act sooner rather than later to save themselves some money. In a few months time the same cover is likely to cost you more – for the rest of the time you have the policy. A £5 a month hike in the cost of your cover will cost you an extra £1,500 over the life of a 25 year policy. Surely, a £1,500 saving is worth acting on?
Of course looking protecting your family needs to be viewed as part of your overall financial roadmap. At 44 Financial Ltd we offer the Good Parent Review. This looks at exactly the types of issues that parents with young children may need to wrestle with. It’ll not only look at family protection but also issues of parental responsibility and wealth preservation if a parent dies.
As a father of three young children I am acutely aware of the need for parents and carers to be adequately covered. If you’d like to book an initial consultation contact us by clicking here.
Steve Clark
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Surrogate parents & maternity leave
A tribunal is to refer to the European Court of Justice the question of whether a mother expecting a baby through surrogacy is entitled to maternity leave and various benefits including paid leave.
The argument is that she needs the time so that she can bond with her baby, establish breastfeeding and maintain and develop her family life.
There’s probably a long way to go on this case but it clearly represents a change in thinking about the scope of maternity leave and who qualifies.
Watch this space as always.
Steve Clark
Tartan Taxation–Celtic chaos for pensions?
Being a Scotsman (albeit having lived in England for most of my life) the question of will we, won’t we have independence has cropped up since, in my case, 1976.
Well it now seems that the Scotland Bill – which is currently making its way through Parliament – may well cause further turmoil in an already downtrodden pensions world.
We thank Louisa Knox of law firm Shepherd and Wedderburn, for her recent article that draws attention to the problems the current Scotland Bill would pose for the pensions industry. It is an excellent and thought provoking piece. You can click through to the article here.
The last thing the pensions world needs is more uncertainty and red tape. It would seem as if the Holyrood and Westminster politicians need to get their heads together to think this one through. What is the chance of that happening?
Steve Clark