Pension split on divorce

[Captrik]

Hello, recently joined and looking for help with this I can’t find the answer anywhere.

let’s assume in a divorce a pension pot of £100k (dc) is to be split 50/50.

now assume that one party wants cash rather than a pension sharing order.

does that equate to £50k cash?

Reason ask is as I high rate tax payer if I pension share then that £50k (in the pension) only cost me £25k ‘cash’ due to tax relief if I give £50k cash then it costs me 50% more.

hence if a party wants a cash equivalent it that amount “prorated” in any way to allow for this?

also worth nothing that if the party gets it as £50k cash it’s a tax free amount. Whereas the £100k in the pension will be taxed as income on drawdown.

Thanks for advice

 

[Dave Vanian]

I note you use the £ symbol. Are you in Ireland? This is an Irish website and most of the knowledge of the contributors here would be of Irish pensions.

 

[Steven Barrett]

Work out what the net present value of the £50k pension at retirement will be. It could well be worth more than 50k cash today. Of course, you assume all the risk that it won't be worth more.

Or just don't agree to it. You're getting divorced. The marriage is over already...