In financial remedy proceedings in England, the treatment of pension accruals prior to the start of a relationship can be complex and is often subject to judicial discretion. The general principle is that assets acquired before the marriage or civil partnership are considered non-matrimonial property. However, the court has the discretion to include these assets in the financial settlement if it deems it fair to do so.
Key Considerations
- Non-Matrimonial Property Pension accruals prior to the start of the relationship are generally considered non-matrimonial property. This means they are not automatically subject to division between the parties.
- Needs of the Parties The court will consider the needs of both parties, including their housing and income needs. If the needs of one party cannot be met without including pre-marital pension accruals, the court may decide to include them in the financial settlement.
- Length of the Marriage The length of the marriage or civil partnership can influence the court's decision. In longer marriages, the distinction between matrimonial and non-matrimonial property may become less significant, and the court may be more inclined to share pre-marital pension accruals.
- Contributions The court will also consider the contributions made by each party to the marriage, including non-financial contributions such as homemaking and childcare. If one party has made significant contributions, the court may decide to include pre-marital pension accruals in the settlement.
- Fairness The overarching principle is fairness. The court will aim to achieve a fair outcome for both parties, taking into account all the circumstances of the case.
Relevant Case Law
Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 This case established that non-matrimonial property, including pre-marital pension accruals, can be included in the financial settlement if it is fair to do so.
W v H (Divorce: Financial Remedies) [2020] EWFC B10 In this case, HHJ Hess addressed the issue of post-separation pension accrual, stating that post-separation contributions are generally considered non-matrimonial property. While this case specifically dealt with post-separation accruals, the principles can be analogously applied to pre-marital accruals.
W v H (Divorce: Financial Remedies) [2021] EWFC B63 Recorder Salter endorsed the approach of HHJ Hess, referencing the Pensions Advisory Group (PAG) Report in his judgment.
Guide to the Treatment of Pensions on Divorce (2nd edition) The PAG Report, judicially endorsed, highlights the complexity of pension offsetting and emphasises fairness in needs-based cases.
Practical Steps
- Disclosure Both parties should provide full disclosure of their pension assets, including details of when the pension was accrued.
- Valuation Obtain a valuation of the pension assets, distinguishing between pre-marital and marital accruals.
- Negotiation Consider negotiating a settlement that takes into account the needs and contributions of both parties, potentially using mediation or collaborative law.
- Legal Advice Seek legal advice to understand how the principles of fairness and needs may apply to your specific circumstances.
Conclusion
While pension accruals prior to the start of a relationship are generally considered non-matrimonial property, the court has the discretion to include them in the financial settlement if it is fair to do so. The key factors the court will consider include the needs of the parties, the length of the marriage, and the contributions made by each party.
