Here for you: Please note that Brookman’s services remain uninterrupted during this time. Read more

Pension Freedom & Divorce

The new pension freedom rules introduced from 2015 have a profound effect on financial settlements in divorce and separation cases. However, the complexity of pension legislation demands an enhanced level of due diligence which could test the most technically adept members of the legal profession, not to mention their lay clients.

For those at or approaching retirement age, the new pension rules will turn previously inaccessible income-bearing assets into cash, but the temptation to use the proceeds to broker a separation could have disastrous irreversible consequences.

The most complex legislation surrounds Final Salary pensions of which there are 11 million members in the UK, excluding those in Superannuation. At the last reckoning in April, these schemes were only 67% funded on a wind-up basis, which means that one-third of Cash Equivalent Transfer Values (CETVs) offered by scheme trustees are likely to have been discounted and will not reflect the true value of the preserved benefits.

Even if a scheme is fully funded, the CETV will still often be discounted to reflect the likely out-performance of the underlying assets and to protect the benefits of the remaining scheme members.

Finally, the bulk-buying annuity deals struck by pension trustees are likely to mean that any CETV is unlikely to purchase the equivalent income in the open market.

In the case of company Defined Contribution schemes accumulated pre-A Day (6/4/06), there can exist protect retirement ages (from age 50) and enhanced tax-free lump sums which will be lost on transfer. There is also the distinct possibility that scheme trustees will be unable or unwilling to facilitate pension freedom, especially if the member is still an employee.

Personal pensions are not exempt: guaranteed annuity rates, market value reductions on with-profits funds and transfer penalties on some commission-based schemes mean that an early exit could have punitive consequences.

The other main areas of concern revolve around the tax consequences of liberating pension monies and the effect on state benefits.

Barring the tax-free lump sum, all other withdrawals from a pension are taxed as income. Therefore, a significant withdrawal could attract income tax at a higher rate than the relief on the original contribution, especially where the total income for the year exceeds £100,000, resulting in the loss of a personal allowance. A withdrawal that pushes income over £50,000 in a tax year will cause the loss of Child Benefit.

The final matter to be aware of is if a client uses the new rules to access a lump sum from their pension, their annual allowance could be reduced from the current £40,000 to £10,000, which will have a significant effect on their ability to place future monies into a tax-advantaged wrapper.

So, whilst pension freedom will be seen by some to be the new panacea in resolution, the interest of the client will rarely be served without a new level of due diligence and plain English advice from a fully qualified professional.

(With thanks and acknowledgement to Ross Glanfield, Chartered Financial Planner)

Enquire Now

Got a question? ask us now...

Kindly complete the form below to send an enquiry.
Your message will be sent to one of our solicitors.
Everything you send in this form is secured and encrypted the moment you submit it.
Discretion is guaranteed.


  • 1. Personal Information:

  • You do not need to provide a telephone number, however, it is helpful for us should our email response not be successfully delivered to you
  • 2. More Information

    Is there anything else you would like to tell us at this stage?
  • This field is for validation purposes and should be left unchanged.

What our clients are saying:

‘BJ’, (June 2020)

“I can’t compare this firm to any other firm as I have never used lawyers before.  What I would say, however, is that all of the dealings I had with Brookman regarding my divorce were efficient and excellent.

This is in sharp contrast with the firm of lawyers my ex-husband chose which seemed to lack communication, didn’t have documents ready when required and seemed very disorganised in my opinion.

Communication regarding my case, knowledge of issues raised and advice given were all outstanding with Brookman.  The level of support during a very difficult and emotional time was excellent. All of the employees with whom I came into contact, the secretaries, the financial team and all of the lawyers were very efficient and professional.

The two lawyers I worked with were Henry Brookman and Jennifer Douglas.

Henry was very knowledgeable, extremely supportive and very efficient and available. I would say that the service I received was outstanding.

Jennifer was a younger, less experienced lawyer but she was also very efficient, knowledgeable and available.  I felt I was able to trust and rely on her to do a good job and she dealt with matters arising quickly and efficiently.”


Google Reviews

Brookman Solicitors

64 Reviews

Wim Jansen 24/06/2020

I contacted Brookman to ask for information regarding the validity of an international divorce court ruling. They were very quick in providing me with the right information. When I had another question a few months later around children matters I phoned them again and after taking some background information and contact details they booked me in for a free telephone consultation with 1 of their partners Talitha Brookman. She spent half an hour of her time explaining to me what I could expect and provided legal advice. All was free of charge. I would not hesitate to contact them again should any matter become more formal and have to go through court. The service has been quick, professional and very friendly.

Rebecca Brown 01/06/2020

Highly recommend this firm. Having searched around different firms for advice for some time, I had a free consultation with Henry Brookman. He was incredibly knowledgeable about my complex situation, gave straightforward advice and empowered me to understand exactly how I need to proceed.

Nik Carter 10/05/2020

I recently had a free initial consultation with Henry Brookman via video conference. He was considered and meticulous in his approach and gave me well thought through advice. He followed this up with a letter in writing summarising the advice he gave me. I would thoroughly recommend his services to anyone looking for legal representation in a divorce.

Sarah Jones 02/05/2020

Henry was extremely helpful and pleasant to speak with. He provided comprehensive advice in a matter of hours and responded promptly to any queries I had. I would highly recommend speaking with him.

Shazan Awam 19/04/2020

Very helpful and thorough advice. Highly Recommend!