The recent case of BS v HC is the first case published, from the higher courts, specifically addressing the issue of the extent to which pensions earned outside a marriage, may become pensions which the court thinks should be shared between a divorcing couple, in their divorce, i.e. may become “matrimonialised”.
Usually, this becomes an issue in a divorce, where the party with modest pension rights seeks to draw into the matrimonial pot, the far larger pensions the other party has, and which the other party clearly accrued prior (although this can also relate to pension rights accrued after separation, if the period if separation is substantial) to the marriage.
The most striking practical implication is that the non-matrimonial segment of a pension may nevertheless be matrimonialised where there is a common intention to put it into their joint use and enjoyment in the future, and reliance on that intention by the other spouse, to their detriment.
Helpfully, the judge included a specific example, in the context of an imagined exchange between two spouses, i.e.: ‘if I contribute my £1m of cash to purchase a family home in joint names, will you agree to treat your £1m pension as a joint asset, even if it remains in your name’, which would, if agreed and acted upon, mean the matrimonialisation of the entire pension.
A further consequence of this development will no doubt be the requirement to set out, in detailed written statements, exactly what evidence the spouse seeking the higher pension share relies on.
What we can take from this case is:-
- Just because one party wants all pensions to be shared 50/50, even if a significant portion is non matrimonial, this is not necessarily what will happen.
- The bar to prove that pensions which are, on the face of it, non matrimonial, have been “matrimonialised”, is high. Solid evidence will be required.
- Every case will be fact specific, and the “need” for a share of more than the matrimonial pensions will very likely be required to be specifically set out.
- The court is much more interested in a fair outcome, than mathematical precision, and will take a very broad brush approach to this.
If this is something you are concerned about, please get in touch with our expert family solicitors who specialise in pensions. Contact us at info@brethertons.co.uk or call all 01295 270999 (Banbury Office), 01869 252161 (Bicester Office), 01788 579579 (Rugby Office) or 01242 472747 (Cheltenham) for further information.
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