Why get married? Of course, because you love each other - but what some cohabiting couples don't consider is the legal and financial benefits of being married.
Besides the food, flowers, favours and gifts, you’re also entering a major contract. Marriage and civil partnerships bring with them a number of responsibilities, but also several perks.
Here are key financial and legal points to consider when tying the knot.
- The initial cost of marriage
- Financial perks of being married
- The marriage allowance
- How does marriage affect children?
- How being married affects your will
- Marriage and pensions
- Marriage and separation
- Civil partnerships
The cost of marriage
Big weddings are notoriously expensive – the average cost in the UK is now over £20,000. But if that’s all that puts you off getting married, think again.
The legal benefits and safeguards of being in a married couple are worthwhile, and a low-key ceremony needn’t break the bank.
It’s just as romantic to use your hard-earned joint savings as a deposit on your first home together.
The financial perks of marriage
Marriage may leave couples significantly better off over time after the wedding has been paid for.
One advantage is that spouses may be able to transfer money and assets between them tax-free, which can reduce your overall tax bill.
You also have more financial protection if you were to separate, or if one of you were to die.
For instance, if you have a joint mortgage but are not married, you wouldn’t automatically inherit your partner’s share of the home if they died.
Being married, on the other hand, means all assets are owned jointly between you.
Similarly, if an unmarried couple split up, each partner keeps what is legally theirs, which can be tough on a low-earning partner. But if a married couple divorces, assets can be shared more fairly.
There is also the marriage allowance, which can save you income tax.
The lower-earning spouse can transfer up to £1,260 of their personal allowance to the higher-earner, reducing their annual tax bill by up to £252.
Find out more about shared finances for married couples.
Are married parents better for children?
Whether you’re married or not, as biological or adoptive parents, you both have a parental responsibility to support your children financially.
However, if the parents aren’t married, only the biological mother has parental responsibility for the child.
Parental responsibility is the legal right to make decisions about a child’s life, such as their name, education, home, health, religious upbringing and money set aside for them.
Anyone married to the mother has parental responsibility – even if they are unrelated to the child.
Does getting married affect my will?
When you get married, your previous will is invalid, so you need to write a new one.
If you don’t, your entire estate will automatically be left to your spouse, which can mean that your children, including any from previous relationships, don’t receive any inheritance.
On the other hand, if you’re not married, your partner won’t get anything if you die, unless your will specifies that they should.
And if you’ve got a mortgage together, they will be fully responsible for it if you die.
Even worse, if there are other claims on your share of it, such as from your children, your partner may lose the home. A solicitor can help you draw up a will.
There are more savings when it comes to inheritance tax.
When one of you dies, any money or assets passed on are free from inheritance tax if you’re married.
What about our pensions?
When you’re married, you may be entitled to your spouse’s state pension after they die, depending on their level of national insurance contributions.
Note that it doesn’t automatically entitle you to any of your spouse’s workplace pension, or death-in-service benefits.
For that, each spouse must name the other as the nominated beneficiary of the pension.
Take particular care if you remarry, as old pension pots may still have your ex-spouse named as a beneficiary.
What happens if we separate?
If you separate and you’re not married, you’re not entitled to anything you don’t jointly own.
Furthermore, it can be difficult to prove joint ownership, and this will probably require legal advice.
When you’re married, things are a lot simpler. When you divorce, all the assets of the marriage are treated as joint assets, so you have a better chance of a fair settlement.
Some couples choose to sign a prenuptial agreement before they get married or a postnuptial one after the wedding to outline what will happen if they decide to split.
It can offer you protection if you want to make sure your spouse can’t claim against some of your family’s assets if you divorce.
Is this all the same for civil partnerships?
As a civil partnership is almost legally identical to marriage, all of the above still stands.
If you need help with your finances, getting financial advice is a good idea. Unbiased can quickly connect you to a financial adviser that is regulated by the Financial Conduct Authority.