Sounds as if her spouse will be doing very nicely thankyou - no mortgage any more and gets to keep his pension! I hope it's not too big a mortgage and all qualifies, ie no capitalised arrears, consolidated debts and so on. Does the mortgage lender agree to release him from the mortgage? It can't happen unless they do. How would your client pay off the capital, assuming there isn't an unusually well erforming endowment policy around? How old is your client and how long would the mortgage otherwise run? How much equity is there in the house? What, apart from indefinitely encumbered capital, is she getting out of this?
Now let's have a look at what is being proposed. Pension credit does not have the notional income rule that other benefits have, that you are treated as having income that would automatically be available to you if you applied for it. To get pension sharing on divorce, you have to apply for a court order and I'm not a family lawyer but I doubt that it is automatic, so it wouldn't be notional income even in the benefits that have it.
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