The Department of Work and Pensions have published their formal guidance to explain how State Pensions may be shared from 6th April 2016. This blog item is intended to help summarise that guidance, not replace it. Until practice is established this article should not be relied upon over the full DWP guidance .
The headlines are:
- Nothing changes for transferors who attain their State Retirement Age on or before 5th April 2016
- Transferors who attain their State Retirement Age on or after 6th April 2016 will NOT be able to share their Additional State Pension UNLESS the petition has an issue date of 5th April 2016 or earlier.
- Although transferors who attain their State Retirement Age on or after 6th April 2016 will NOT be able to share their Additional State Pension, if they have a new Flat Rate State Pension Protected Payment, then the Protected Payment element WILL be shareable.
- The DWP advise that for petitions issued on or before 5th April 2016 it will still be possible to obtain a (transitional arrangements) valuation of Additional State Pension entitlement.
- Similarly from 6th April 2016 the DWP advise that it will be possible to obtain a valuation of any Protected Payment entitlement, however this will not be capitalised as a sharing order against a Protected Payment entitlement will need to be expressed and paid as a percentage of the weekly amount of the Protected Payment. For negotiating purposes, advocates and self-representers should consider the commissioning of a formal actuarial valuation or a fair valuation from a suitably qualified and experienced Chartered, Independent Financial Planner.
Paul Corner is a Chartered Financial Planner, award-winning university lecturer, adviser to the DWP’s Pensions Advisory Service and financial planning member of the ‘Resolution’ the Solicitor’s Family Law Association.Tax treatment and laws related to personal finances change on a regular basis. Any investments or financial products referred to are not endorsed, nor recommended. Discussion points raised in blog articles should not be acted upon without professional advice. E & O.E.
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