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Topic:
Pension discounting (4 Posts)
Started By:
Date:
02 January, 2018 07:10PM
Pension discounting
Genisis99 - 02 January, 2018 07:10PM
I am trying to understand the courts position on pension offsetting and wondering if anyone can advise?

I have been to mediation with ex and the mediator has suggested that I keep my pension and ex keeps the house. The house is worth probably worth about the same as my pensions plus a small amount of savings. I really don’t like the idea as I cannot get hold of my pensions for a good 10 year and then only 25% tax free on the dc schemes and clearing there is tax to pay on pensions on retirement. Plus with a large percentage invested in the stockmartet there is no guarantee of performance whereas housing market has failed better. I have limited savings also to buy another place and will have to take on a hearty mortgage late on in life. Ex is refusing to sell the house but can not justify why she need such a big house with children older than 18 and not there much, uni etc.

Is there is typical discounting percentage to apply on the pension for the non cash liquid pension v more cash liquid house?

Any thoughts appreciated as really not keen on this pension offsetting.
Re: Pension discounting
davidterry - 03 January, 2018 11:03AM
Well, in general a court will order a pension share rather than offsetting unless the latter is what both parties are agreed upon. That is because where there are six apples (the house) and six pears (the pension) courts usually think it fairer for each party to receive three apples and three pears for exactly the reasons you have explained. Dividing in this way shares the risks and benefits.

Whether it is feasible for the house to be sold and the net proceeds of sale divided depends upon a lot of things not the least of which are (1) the value of the house, (2) the size of the outstanding mortgage, (3) your wife's mortgage capacity and (4) whether and for how long any of the children will still be dependent (whether or not they are over 18). I mention this because the mediator may have suggested offsetting because he/she does not think a sale is feasible. Whether it is or not very much depends upon the four facts I have mentioned above.
Re: Pension discounting
Genisis99 - 03 January, 2018 11:00PM
It is a significant sized 5 bedroom house with no mortgage and only one dependent under 18. A significant percentage of house sales proceeds has been offered due to limited mortgage capacity but refuses to entertain the notion of selling due emotional attachment issues to the property.

She refuses to discuss further in mediation and not interested in the these points. I fear my only option now is to force the house sale through the courts?
Re: Pension discounting
davidterry - 04 January, 2018 09:49AM
If there is one dependent under the age of 18 and the property is five bed rooms then the chances are that a court would order a deferred sale - ie when the child ceases to be dependent or finishes full time education. From what you say your wife would probably get more than half of the equity if she has no significant mortgage raising capacity and she genuinely needs more than half in order to provide herself with satisfactory accommodation in due course. The fact that your wife has an emotional attachment to the property would carry no weight with a court. This looks like a case where a fair outcome would be to divide the equity and make a pension share rather than one spouse having all the equity and (presumably) less of a pension share. A court would prefer this sort of outcome because the pension share also provides some sort of income for your wife in the future.
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