Six financial perks to being married that add up to £653k – how many are you missing out on?

MARRIAGE may be classed at the ultimate declaration of love - but did you know there are also plenty of financial perks that come with saying "I do"?

Despite this, the number of Brits choosing to put a ring on it has been in a steady decline - with ONS figures showing just one in four people in the UK are opting to get hitched today.

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This is compared to around seven out of 10 people back in the 1970s.

This is due to a number of factors including people moving away from traditions, the cost of living crisis and a rise in co-habitation instead of tying the knot.

However Laura Suter, director of personal finance at AJ Bell, has warned non-married couples could be missing out on huge tax perks worth thousands.

She explained: "Lots of couples want to keep their money separate – and there may be sensible reasons for that – but it’s worth considering whether it’s worth sharing assets to save on tax as a couple.

"From organising cash savings or investments between the couple, to writing a will or claiming the marriage allowance, there are lots of ways couples can reduce their tax bill that they probably aren’t aware of."

It goes without saying, marriage is a long-term commitment and you and your partner should be feeling confident in your decision to avoid future heartbreak.

But if you are at that stage, here we list six of the best financial benefits that come with getting hitched - and they could be worth a staggering £653,000 in tax perks and savings.

Marriage Allowance - £1,260

This is a tax break which lets allows married partners to transfer £1,260 of their personal allowance.

Doing this reduces their tax by up to £252 in the tax year, which starts in April.

Your personal tax-free allowance worth is £12,570. Once your earnings go over this level, you start paying tax at the basic rate of 20%.

However, in a marriage, the partner who earns below the personal allowance can transfer up to 10% of it to their partner.

This adds up to a maximum of £1,260 to the partner's personal allowance, reducing how much tax they pay by £252.

Sarah Coles, head of personal finance at Hargreaves Lansdown told The Sun: "It’s worth £252 this year and can be backdated for up to four years (as long as you qualified in each of those years), so in the first year you could get £1,008 of tax relief."

Inheritance tax protection - £650,000

Inheritance tax is a tax on the property, possessions and money of someone who has died.

It's charged at 40% and is only applied if the deceased person's assets are worth more than £325,000.

Myron Jobson, personal fiance expert at Interactive Investor said marriage can provide "significant protection" against the hefty inheritance tax bill. 

He said: "If you’re married or in a civil partnership, you can transfer your estate to your spouse entirely tax-free, regardless of its value.

"This is a stark contrast to unmarried couples, who could see a large chunk of their partner’s estate swallowed by the taxman at the standard 40% rate if it exceeds the IHT threshold of £325,000."

Spouses can also inherit any unused portion of the IHT threshold, doubling it to £650,000 for married couples.

Transferring savings and investments - £1,000s

If you’re married or in a civil partnership, you can share assets between you and double the amount of money you can make from them before you are taxed.

For example, you can share assets like a rental property or investments with your husband or wife without triggering a potential Capital Gains Tax bill.

You pay capital gains tax, also known as CGT, on the profits you make when you dispose of certain items that have gone up in value.

"Disposing" is when you choose to sell something, give it away, swap it, or if you get compensation for it - such as an insurance payout.

You get a tax-free allowance each year, and you only have to pay tax on any profits you have above that amount.

This year, the tax-free allowance is £12,700.

Sarah Coles says if you tried to do this with an unmarried partner, you could end up paying capital gains tax when you give them the assets.

She explained: "If, for example, you handed them half a property with a £10,000 gain on that slice, then a basic rate taxpayer (who is still below the threshold after the gain), might pay £1,680."

HOW TO SAVE FOR A WEDDING

MONEY expert Sarah Coles, head of personal finance at Hargreaves Lansdown, gives her top tips on how to save for a wedding.

START SAVING HABITS EARLY

Don’t wait until the day you decide to get married to start saving: start your good habits early

You might spend your savings on buying a home together, or travelling the world instead, but you’ll never be sorry you had savings to fall back on.

MAKE A MONTHLY BUDGET

Think about your monthly spending, and where you can cut costs

Once you’ve freed up some cash each month, set up a direct debit on payday to go into a savings account.

TEAM WORK WHEN SAVING

Agree to be accountable to one another

It can help you keep on track if you promise one another to save a specific sum and not spend it on anything else.

It can make for some awkward conversations, but it’s a great way to stick to your savings targets.

MAXIMISE YOUR SAVINGS

If you are saving gradually, or plan to start spending within the next year, the most sensible home for your money is an easy access savings account.

But you don’t have to settle for a ropey rate from a high street bank. Online banks and savings platforms tend to have much better deals.

STICK TO IT

There’s no point doing all these great things and then blowing the budget, borrowing, and wasting a fortune on interest.

You want to start married life in the best possible financial shape, not digging yourself out of a debt hole.

Pensions and spousal benefits - £169.50

If you are married or in a civil partnership and one of you dies, then whoever survives could increase their basic state pension by up to £169.50 a week.

This only applies if your own basic state pension is less than £169.50 a week and if your late spouse or civil partner had enough National Insurance contributions.

You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.

To get the old, full basic state pension, you will need 30 years of contributions or credits. 

These rules only apply if you reached the state pension age on or before April 6 2016, when new State Pension rules where introduced.

You should contact the pensions service to see if you could be entitled to claim.

You can find out more about by visiting, www.gov.uk/state-pension/inheritance-spouse-civil-partner.

Myron said: "When it comes to pensions, marriage opens up some valuable options.

"For example, a surviving spouse may inherit a partner’s workplace pension or receive favourable payouts."

He added: "Unmarried partners might not be so lucky, depending on the scheme rules."

STAYING FINANCIALLY SMART AMID A SPILT

IF you do end up parting ways with a loved-one, then it pays to be financially savvy, as Myron Jobson, senior personal finance analyst, interactive investor, explains here...

CAN YOU 'DIY DIVORCE'?

For straightforward cases, a DIY divorce - where you handle the paperwork yourself - could be an option.

But be wary: cutting corners on legal advice could cost you more in the long run if financial settlements aren’t properly considered.

IF NOT, SAVE MONEY WITH MEDIATION

Court proceedings can be eye-wateringly expensive, while mediation offers a structured way to resolve disputes at a fraction of the cost.

DON'T FORGET YOUR PENSION

Take stock of all shared assets - this isn’t just about property and savings, but also pensions, investments, and even debts. Don’t make the mistake of focusing only on the house. Pensions can be one of the most valuable assets in a divorce.

This oversight leads many to miss out on future income that should have been theirs.

A pension left invested over a long period of time is turbocharged by the power of compounding, where growth is not only on the original contributions but also on previous returns, significantly increasing the overall value of the pot overtime.

DON'T LEAVE YOUR FUTURE TO CHANCE

Updating your will, reassessing your budget, and even seeking independent financial advice can help you make informed decisions that protect your long-term stability.

Remember, things like refinancing a mortgage in your own name or adjusting to a single-income household can stretch your finances.

Inherit partner's ISA allowance - £1,000s

If your spouse passes away you can retain the tax advantages of their ISA savings.

An ISA is a type of saving account which allows you to save up to £20,000 a year tax-free.

The inherited ISA allowance allows a surviving spouse or civil partner to inherit the ISA benefits of their deceased partner.

This means they can add an amount up to the value of the deceased’s ISA savings to their own ISA allowance, in addition to the standard annual ISA limit of £20,000 for adults.

Myron said: "For example, if your partner had £10,000 in ISAs, you could contribute this amount to your ISA on top of your current allowance, enabling you to shelter more savings from tax.

“It’s an invaluable way to preserve the tax efficiency of your family’s savings, but it’s important to check with your provider for the specific rules and act within the required time frame.”

More security when separating - £100s

It's not nice thinking about the end of a relationship, but Myron says married couples have clearer rights when it comes to dividing assets after a spilt.

He said: "While it’s not a topic anyone enjoys contemplating, the financial security marriage provides in the case of separation or death is undeniable."

For example, if you lived with your partner in a house they owned and you then decided to spilt, it is very unlikely you could keep the house.

And if you choose to hire a solicitor and fight the battle you could incur hundreds in legal fees.

In the UK, hourly solicitor fees can range from around £100 for a junior solicitor to £350 or more for a senior or highly specialised solicitor.

But if you are married you could be entitled to a share of it in a divorce as it's considered a marital asset.

This means the court will likely divide the property fairly based on your needs and the circumstances of the marriage, regardless of who originally purchased it.