The number of Brits getting married is at an all-time low but could getting tying the knot make financial sense?
Getting married could make or break your finances, from marriage tax allowances to the cost of getting a divorce
WEDDING bells will ring across the country as we celebrate Harry and Meghan’s big day today.
However, that enthusiasm comes despite our growing indifference to marriage.
The latest research shows the number of British people tying the knot is at an all-time LOW.
And as marriage declines, there has also been a rise in the number of cohabiting couples.
In fact, 3.3million couples are living together without being married or in a civil partnership — more than double the number of a decade ago, according to the Office for National Statistics.
But whether you marry or not, there are financial risks.
Unmarried couples can lose out on tax allowances, as well as state benefits such as widow’s allowances and bereavement payments.
But if the marriage fails, the resulting separation and divorce can devastate finances.
Sarah Coles, personal finance expert at Hargreaves Lansdown, says: “You don’t have to hire a castle and invite 2,000 guests to spend a fortune on a wedding — the average couple forks out more than £27,000.
“The tax perks for married couples mean that even in cold financial terms, you could be better off in the long run.
“However, marriage is not something anyone would recommend rushing into for the tax breaks alone.
“The calculations only work if you stay married for life — and a major slice of the payback comes from inheritance tax breaks.
“If you introduce a divorce into the proceedings, you’re actually looking at a significant financial loss.
“The wrong marriage may end up being the most expensive mistake you ever make.”
There were 239,000 marriages between opposite-sex couples across England and Wales in 2015, the most recent figures available.
That is a fall of 3.4 per cent from 2014.
Forty years ago, in 1978, the figure was 368,258.
Today, Sun Money looks at how tying the knot can make you richer — or poorer.
RICHER
INHERITANCE TAX: Married people or civil partners can leave everything to each other on death without paying any inheritance tax.
There is no such perk for those who just live together.
That means if you die unmarried, your partner may have to sell off your home to meet the bill for inheritance tax.
The tax is payable if the value of your estate – home, car, jewellery and so on – adds up to more than £325,000.
Anything above this is taxed at 40 per cent.
People who own properties also get to pass on an extra £125,000.
So, currently the allowance for a single person is £450,000.
Both the £325,000 general allowance and £125,000 property allowance are transferable between married couples, which means any unused allowance can roll over to the surviving spouse.
Then when the second person dies, they can leave a bigger cash sum to their children or grandkids.
It means this tax year, married couples with a main residence worth at least £250,000 will be able to leave a total estate of £900,000 to children or grandchildren before any inheritance tax is liable.
Christine Thornley, head of wills at the solicitors Gorvins, said: “With a nil rate band of £325,000 and the ability to use an extra allowance of £125,000 if you leave your home to your children, wealthy co-habiting couples could pay over £180,000 more inheritance tax than a married couple in the same situation.”
MARRIAGE TAX ALLOWANCE: Married couples with one person on a low income can claim a valuable tax perk of around £230 every year.
To qualify, one of the pair must not earn enough to pay income tax – less than £11,850 in 2018-19 – and the other must pay basic-rate tax, earning between £11,850 and £46,350.
In Scotland you cannot earn more than £43,430. The lower-earning individual is able to pass £1,190 of their personal tax-free allowance to their partner, which will cut the couple’s tax bill by £238 a year.
You can claim as far back as April 2015 when this was introduced.
Uptake is very low. It is thought only half of the 4million couples eligible for the allowance claim it.
ALICE SCHOFIELD, 34, took out a credit card and sold off shares to pay for her £12,000 dream wedding last October.
The customer services consultant from Brighton, pictured on her big day, says marrying Jay Drysdale, 43, was worth getting into debt for. Alice, who rents a house with Jay, a painter and decorator, says: “The day was amazing – it went by in a blur.
“We didn’t spend as much as others do but for me it was a lot. I got into more debt than I wanted to but it is manageable and worth it as I don’t have to plan another wedding.”
The couple plan to take advantage of the marriage tax allowance, which they say is an “added bonus” to tying the knot.
PENSIONS: Someone who is married should get benefits from their spouse’s pension when they die – though this depends on the type of pension.
Final salary scheme pensions are the most generous, with a widow or widower getting around half the amount their dead wife or husband got. But if a couple were just living together, the surviving partner might not get anything.
Those with a normal company pension – where workers pay a contribution each month, topped up by one from their firm – may also have benefits that can be passed on to a wife or husband. There are marriage perks with the state pension, too.
Under the old state pension system, married pensioners who retired before April 6, 2016, have the right to an improved state pension when their spouse dies – but unmarried OAPs miss out. Helen Morrissey, from pension company The Royal London, says this can be worth around £2,500 a year to the surviving wife or husband.
CHEAPER INSURANCE: Married motorists benefit from less expensive car insurance.
On average, married women aged 30 pay £905 for their car insurance, while single women are hit for £1,102, according to new research by comparison website confused.com.
Married men aged 37 stand to make the biggest saving, paying £962, while single men of the same age are forking out £1,129.
Amanda Stretton, motoring editor at confused.com, says: “Lower car insurance costs is as good a motivation as any to get married.”
POORER
COST OF A WEDDING: The average cost of a UK wedding has hit a record high of £27,161, according to website Hitched.
The rising cost is forcing many couples into debt.
Price comparison site MoneySuperMarket, which has had 160,000 wedding loan applications over the past two years, revealed couples were borrowing an average £9,206 in January 2018 for their wedding, an 11 per cent rise on last year.
And 60 per cent of us taking out a wedding loan do not own a house.
Sally Francis, money expert at the website, said: “It’s interesting to see that a significant number of us, particularly millennials, are prioritising marriage over buying a home because, in reality, doing both is often unaffordable.”
HASSLE OF DIVORCE: Getting divorced costs at least £550 for the court fees – and more if it gets nasty and solicitors are involved.
The fee is for court staff to process your divorce, and since March 2016, it also covers your decree absolute application.
You can apply for a divorce yourself online, if it is straightforward, but many people use high street solicitors, who typically charge £150 to £200.
The Government has just launched an online divorce service for couples in England and Wales.
The whole process can be completed online, including the £550 payment for court costs, and you may have to upload supporting documents.
The “petitioner” – the one starting proceedings – pays, but they may seek some of this money back from their spouse.
The price is the same whether the divorce is contested or not, but if it is, there may be more costs involved, including solicitors’ fees.