ALTHOUGH the divorce rate in general is falling, for one age group the trend is upwards, and perhaps surprisingly it is people over 60.

I recently met someone in her late 50s whose ignorance of the financial implications of divorce settlements in England and Wales (there are significant differences in Scotland) was potentially going to cost her tens, and possibly hundreds, of thousands of pounds.

Her husband was offering just half the sale value of their home and she thought that was fair.

She did not realise that she was entitled to a share of their total joint assets, including the value of her husband’s pension scheme.

She had given up her career to raise their children and support her husband and has little by way of pension provision in her own right. He has long service within a final salary scheme and has other financial arrangements.

She now has little scope to improve her potential position in retirement. All this is relevant and should be taken into account when a settlement is being reached, along with issues such as their ages, duration of their marriage and their previous standard of living.

The starting point in a divorce settlement is always to try to achieve a true clean break for the parties by offsetting other assets – such as the family home, savings and investments, or policy values – against the value of the pension funds. This is the simplest route, it saves on costs, and it allows the couple to cut all links if there are no dependant children. It’s the favoured route for younger couples.

However, pension funds may well be the largest single asset within matrimonial property for people over 50.

Older people are likely to have a wider and more valuable range of pension assets.

So what happens with pension funds if they are to be split?

The pension benefits are valued as a lump sum and then the value is apportioned, usually by “pension sharing”.

The existing pension scheme can set up a separate pot for the new member within the scheme. This fund then belongs to the ex-spouse and benefits can be taken in accordance with the provisions of the scheme.

The alternative is that the scheme offers a transfer value to go to a different pension arrangement. Personal pension benefits can be taken from the age of 55 (50 until April 5 when the rules change).

The value of state pension benefits can be taken into account in any divorce settlement but the basic state pension cannot be shared.

If you are over 50 and about to get divorced, deciding what to do with the pensions may well play a big part in your divorce settlement and your future financial security.

It is crucial to take both specialist legal and financial planning advice so that the many options, pitfalls and complicated pension rules can be investigated. Do not choose the path of least resistance simply to hurry things along; it could cost you dearly.

In fact, it is important to involve your financial planner early in the proceedings.

There is a tendency for solicitors to introduce the financial planner late in the process when the “deal is done”.

It is often then discovered that there might have been a more beneficial or tax efficient way to reach the settlement, particularly for people over 50, or those close to retirement.

■ Joss Harwood, chartered financial planner, Eldon Financial Planning. Visit eldonfinancial.co.uk