SMART MONEY MOVES
Why it might pay to WALK UP THE AISLE
More of us are choosing not to marry – the latest figures reveal that more than 300,000 people aged over 65 are living together as unmarried couples. If money is the deciding factor for saying I Do, read this...
❖ Inheritance tax (IHT) Married couples enjoy more benefits than cohabiters. They can pass their wealth to the surviving spouse free of IHT and transfer unused tax. Cohabiters cannot. A new rule also benefits married couples when they pass their estate on to direct descendants, enabling them to pass on their £175,000 nil rate allowance to their spouse. Assuming an IHT of 40%, being excluded from this scheme puts cohabiting couples at a £70,000 disadvantage.
❖ Income tax There are two tax allowances for married couples: the old one, worth up to £844 a year; and a new one, introduced in April 2015, worth £230 a year in 2017/18. A cohabiting couple who missed out on the Marriage Allowance in each of the three years since it was introduced has already lost £662.
❖ State pension Those who reached pension age before 6 April 2016 retired under the old state pension system, which includes rights for husbands and wives. An older married woman could see her state pension boosted by £2,500 a year following the death of her husband; this is not the case for a cohabiting partner.
There are monetary benefits to being a married couple