Should You Keep the Home or Take a Pension Share?
Ceri Griffiths
Financial Planner for women divorcing CEOs/Millionaires ?? Spear's 500 ?? Soul Led ?? Discreet Due Diligence ?? Financial Abuse and Narcissism Qualifications
Weighing up a pension share v staying in the marital home is one of the toughest decisions many women divorcing face.. Which one should you prioritise?. What are the factors to consider?? Read along to find out.
Staying in the marital home is an emotive topic.? I really encourage you to look at a video that I did with Jill Gullota on my YouTube channel. Jill?is s a divorce coach in America, and she shared her journey in my video, around the emotions that she went through when selling and moving out of the family home.? Her positive and negative experiences are really valuable.? She gives a perspective that may surprise you.
This article will cover more logically?the considerations that you need to make from a financial planning perspective. But I am fully aware that it's a mix of emotion and logic. What I really would be hoping to get from this article is the awareness that you need to be able to make an informed decision. So before you prioritise the home or a pension or another asset, it's about doing it from a place of feeling fully informed.?
How do you get fully informed? There are some steps that you should take.
Firstly, you should ensure that you know what your income is going to be post-divorce and what your outgoings are going to be post-divorce in the?marital home and sense check, can you afford to stay there??
Secondly, you need to understand what your income is going to be in retirement. Can you afford to live in retirement? Can you afford to have the type of retirement that you want? If you cannot afford to have the type of retirement that you want, but you can afford to stay in the marital home, there are some other considerations.?
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For example, would you be willing to downsize at some point in the future, to put some surplus into your retirement planning? That could be explored. Or have you got enough income, even when you stay in the marital home, to start contributing towards your retirement? That could be an option.
If you find yourself in a situation where you can afford to stay in the marital home, but you don't plan to downsize and you cannot afford to make retirement payments, this is when you really need to sense check and feel really happy that you're going to be willing to change your lifestyle significantly in retirement.
The other big scenario I see is women who choose to stay in the marital home, but by doing so, have to?give up so much of their lifestyle, that it actually becomes quite an unhappy scenario. It is something that you need to explore.? Does living in the family home mean more to you than living the type of life you want to/are used to living?
In summary, what you need to be able to do is find out what your income and your outgoings are going to be in the marital home, what your income is, and your outgoings are going to be in retirement and then understand whether or not that is going to be sufficient for you.
Check this out alongside Jill Gullotas video. Hope this is useful.
Family Mediator | Divorce Coach | Author of the Divorce Manual | Passionate about conflict resolution
3 年Thanks Ceri for highlighting this common dilemma around the former family home. As you highlight in your piece, echoed by Mabel in her comment, it is so important for the separating couple to be helped and supported to explore and reality test a range of options together from many different perspectives and specifically supported to explore options which may represent a very real threat and challenge to a person's sense of self (tied up with ownership of the home) and their emotional and psychological insecurities also often tied in with continuing to remain in the home. I often find that people need time to reflect on 'unpalatable' options which may challenge their senses of fairness and challenge what they are needing for their emotional security but are very unlikely to get if they go to court. As you and Mabel highlight, people and couples in these situations often need a great deal of support, at every level, to help them navigate these challenging, practical, emotional and psychological journeys, often involving a significant amount of upheaval and transition for them. There is so much we, as mediators and Divorce Coaches can do to support people in these situations.
Partner/Head of Family Finance at Stephens Scown Specialist in High Net Worth Divorce and Wealth Protection Band 1 in Chambers UK Cornwall Law Society Family Lawyer of the Year 2024 Couples divorce advice service
3 年It is also hugely important to find out the true value of the pension sharing order the person may be entitled to before any decision can be made to offset that for a greater share of the capital that might enable someone to retain the house. In my experience people value tangible, visible assets and can be quick to let go of a pension sharing order. Women more commonly do not pursue their share of a pension on divorce and retaining the house is one of the reasons for that.
Expert Family Mediator, PPC & Specialist Child Inclusive Mediator
3 年This is something so many people struggle with emotionally when they feel they have lost so much already. Without doing the working on income/expenditure now and the future it’s impossible to know if it’s affordable. We see so many women who want to stay in the marital home but the reality is often that it’s simply not affordable- it’s tough when the light bulb moment hits, we need to support them and ensure they have the right info to make informed decisions. Better that than spend ￡15k each fighting over what’s left.
Partner and Head of Mediation and Alternative Dispute Resolution
3 年This is a tricky question. It is easy to get fixated on keeping the family home (for understandable reasons) at all costs. It is important for the client to step back and consider the long term implications.?