I’ve tried to be clear in previous posts but I think some charts might help here. This section is to force the point that the lawyers straight line approach is just plain wrong. So lets first look at a £1M pension pot accrued over 40 years. A typical high earner.
I chose £1M as the numbers are easy to see but as the CURVE in the maths does not change it should be easy to take whaterver CETV/PETV you have, look along the line and simply divide or if your very lucky multiply as needed.
All the charts assume separation in 2024. Draw a vertical line at your marriage date to see the values at marriage.
The consistently paid into with a linear career progression:
The first image shows what the lawyer tells you the pension value is at marriage and says is close enough vs the truth.
The second image shows you your share as calculated by your lawyer vs the actual share and the actual error.
So in this example if you were married on or before 1984 its a 50/50 and your lawyer by sheer luck of maths is correct. Thereafter at ANY point your laywer is wrong, and as you can see the numbers are big. In this £1M pension you are due £500k if a 50/50 split.
If you were married in 1994 your share is £475k NOT the £375 your lawyer calculates. Your lawyer has just lost you £100k.
The sweet spot of error is if you married c2010. where you should demand £335k but your lawyer will suggest that £175k is correct. Thats your lawyer lost you £160k.
As I mentioned these graphs are the same for any pot size so the numbers scale. If the pension pot is £100k then simply divide the example figures by 10. e.g. if 1994 then you should demand £47.5k, if 2010 then £33.5k. but thats what the calculator is for.
The next example is where there has been a big promotion or pension uplift:
The effect of a big promotion or a career change that adds to the pension contributions has NO positive impact on Pre Marital asset value. In this example of the £1M pension pot at separation the effect is as above. The second chart shows you how much more you should be asking for if your partner doubled their salary and contributions in 2005.
Chosing the same two marriage dates of 1994 and 2010 you should actually be asking for £3000 and £8000 more respecively.
The last example is of a closed pension, where the contributions stopped.
As you can see from the chart the issue with the lawyers straight line calculation is still flawed. The PMA value again is only correct at 1984. And again looking at the differences the legal calculaton will be losing you a lot of money. In this £45k lost in 1994 and and £60k in 2010.
I am hoping these worked examples will help.