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Offsetting calculations.

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RobinHoodie
Posted by
New Member

24 Feb 24 #522633 by RobinHoodie

Topic started by RobinHoodie

Soon to be ex and I are in the final stages of agreeing our financials.

one small sticking point is pension. There is a £30k difference in my favour. Ex doesn't want pension and prefers cash to help pay for a new house.

This is all in DC pensions.

How do we go about valuing this into "cash now" terms? My solicitor says it should be around 2/3s of the pension value. So £20k.

what is this based on? Is this accurate?

thanks

RH

hadenoughnow
Moderator

25 Feb 24 #522634 by hadenoughnow

Reply from hadenoughnow

It is a reasonable enough broad brush strokes approach but without knowing your ages it is hard to comment.
The transfer value of the pension would be reduced by the tax due on it when it is paid out. 25% can be taken as a tax free lump sum. There's then adjustment for the difference between cash now and having to wait for it.
The Galbraith tables published a year or so ago are an attempt to make working out offsets more straightforward. It's worth finding them.

Hadenoughnow

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