What are the financial benefits to being married?
If you got engaged on Valentine’s Day, you may now be wondering if there are more benefits to getting married or in a civil partnership than a big knees-up.
If you got engaged on Valentine’s Day, you may now be wondering if there are more benefits to getting married or in a civil partnership than a big knees-up.
Although marriage is falling out of favour and the Government has moved to reflect these modern times, we take a look at the financial breaks still available to officially joined couples;
Married Couples Allowance
For those where one of you is aged 81 or over (and why not?!) and you are married, you can claim Married Couples Allowance.
Marriage Allowance
For those a little younger, there is the Marriage Allowance, which was launched in April 2015. One of you needs to be earning less than £10,600 for you to eligible. Marriage Allowance lets you transfer £1,060 of your Personal Allowance to your partner, which reduces their tax by up to £212 per year.
Car Insurance
Car Insurance is one area where you can save by being married. Insurers use your marital status, along with lots of other factors like your address (except your gender- that was outlawed in 2012) to decide how much to charge you cover. Confused.com found that the average cost of motor insurance for a female driver insured with their spouse was £406, compared to £841 if they were insured as a singleton.*
Inheritance Tax
Currently Inheritance tax is set at 40% on anything left above the threshold when someone passes.
The rate may be reduced to 36% if 10% or more of the estate is left to charity (that’s not a hint.) If you’re married or in a civil partnership, anything you leave to your partner upon your death will be completely exempt from this tax. If you have been cohabiting, you will have to pay the full tax, no matter how long you have lived together.
Pensions
If you aren’t married and your partner dies (this becoming a rather morbid piece) you’re not automatically eligible for any widow(er)’s pension. Furthermore, if they have already started to draw it when they pass, it will be subject to a tax charge of 55% unless it passes to a surviving spouse or civil partner.
What getting married wont effect
Your credit score
Your new husband or wife’s credit history will not be added to your credit report after you are married. The only way your partner’s credit history can affect yours is when you take out joint credit, such as a loan or have joint liabilities, like a joint bank account. Conversely, if you have a good credit history, adding them to your accounts can improve their credit score, possibly making getting a mortgage easier in the future. Only do this if you 100% trust your partners spending habits, as if they get in trouble, it becomes your debt as well.
Getting a mortgage
Unfortunately just being married doesn’t make it any more likely that you will get a mortgage than the unmarried couple next door, as lenders are primarily concerned about your credit history and what you can afford.
*Data from MoneyWise.co.uk
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