What are the financial benefits of getting married?
Q My partner and I have been livingtogether for 15 years. We are very happy to be in a committed, long-term relationship. We have been told that by not getting married we lose some financial benefits. Is there really a financial case for getting wed and what difference can it really make?
A when we look through the lens of finance, it really is difficult to see why any couple in a committed, long-term, cohabiting relationship wouldn’t get married. The financial benefits range from tax-free inheritance to sharing of capital gains tax losses, sharing tax credits and, of course, the widower or widow’s pension.
Here are the four main things you may need to consider:
Taxes
Taxes are definitely not romantic, but married couples can share tax bands and credits. This effectively means a spouse earning significantly more income can lower their tax.
Revenue do not recognise cohabiting couples in the same way and so do not bestow this benefit on them. Stay-at-home parents of married couples are the big winners because they can access the Home Carer Tax Credit.
Pension
The financial benefits of being married are most clear when we look at pensions, married spouses have the right to contributory pensions, and they received a widow/widower pension and the surviving civil partnership pension. The pension system does not recognise other types of relationships in this way.
Inheritance
If married, inheritance tax is very simple: you are entitled to inherit your spouse’s assets without inheritance tax, even if there is no will in place. If there is a will then a married surviving spouse maintains a right to at least a share of the remaining estate, regardless of what the will says.
Separation
In the case of separation, married couples can apply to the courts for maintenance from their spouse, and their family home is legally protected from one spouse selling, mortgaging, leasing or transferring ownership of it without the other’s consent, this is not the case with cohabiting couples.