Why getting married can make financial sense - Sarah Coles

There are a fair number of financial perks to getting married. One that was officially launched to reward married couples back in 2015 was the marriage allowance. To qualify, one half of the married couple or civil partnership usually needs to have an income below the personal allowance and the other needs to be a basic rate taxpayer. The idea is that non-taxpaying partner can transfer £1,260 of their personal allowance to their partner, cutting their tax bill by up to £252 a year. When you apply for it, you can backdate it for four years – as long as you qualified in each of them – so the first year is particularly rewarding. You then get to keep the tax break every year until you tell HMRC you no longer qualify.

Our business newsletter keeps you in the know - sign up now

There’s also a handy rule that makes tax planning easier for married couples, because you can share assets between you without triggering a potential tax bill. If, for example, you were to give half your investments to an unmarried partner, those investments would be assessed for any gains they’ve made while you owned them, and if you bust the annual allowance, you’ll need to pay capital gains tax. The same isn’t true for married couples or civil partners. It means you can share assets between you in the most tax-efficient way possible.

Sharing assets means you can both take advantage of your ISA allowances. You can also both use your personal savings allowance, dividend tax allowance and capital gains tax allowance. If you make money over and above this, outside an ISA or pension, you can make sure the lowest taxpayer holds the assets, so they can pay a lower rate of tax on at least some of it.

You might not want to dwell on it, but married people also get substantial tax benefits on death, not least when it comes to inheritance tax. Anything you leave to a spouse or civil partner is free of inheritance tax. Not only that, but you can also leave them your inheritance tax allowance. It means that the survivor may be able to leave a total of £1 million free of inheritance tax. The same isn’t true for unmarried partners.

There’s a little-known ISA rule that applies too. If you leave cash or investments in an ISA to a spouse, then when you die, it becomes a ‘continuing account of a deceased investor’. Once probate is completed, the spouse will get an extra ISA allowance to wrap all the assets back up and protect them from tax again. If you’re unmarried, you would have to use that year’s ISA allowance to re-wrap the assets – and if you inherited more than £20,000 it could take years to protect them from tax.

Plus there can be some odd rules around leaving a defined benefit pension. There’s typically a 50% spouse’s pension – which you get for the rest of your life. If you’re not married, you won’t usually receive this.

There are some definite financial advantages to getting married, but given that you may have to wait until one of you passes away to see the biggest monetary benefits, you may not want to splurge an unnecessary fortune on the marriage itself. The good news is that this year one of the most dominant wedding trends is for budget weddings.

If you’re happy to focus on the marriage rather than wedding, you can tie the knot on a shoestring. For £250 you can get married at your local registry office or town hall, and have a party at home. If you want to push the boat out a bit more, you can make savvy choices, like skipping Saturdays and peak summer months, opting for a buffet and a paid bar, asking the guests to take photos, running a disco from a laptop, and postponing the honeymoon. By cutting back and negotiating hard, you might choose to spend a few thousand on a bigger celebration, without breaking the bank.

Of course, the trick to a truly financially sound union is picking the right person – and staying married to them. Divorce is always horribly expensive. The process itself will take a financial toll, but you’re also splitting your assets in half, so you’ll lose far more than the cost of the lawyer. Because while marriage may be rewarding on all kinds of levels, the wrong marriage may end up being the most expensive mistake you ever make.

Thousands of pounds with your name on it

It sounds impossible that you could have thousands of pounds sitting around gathering dust that you have no idea about. However, there’s hundreds of millions of pounds lying forgotten in dormant accounts – from pensions and investments to savings and current accounts, so it’s worth taking the time to make sure none of it rightly belongs to you.

There are a number of ways people end up losing accounts, especially if they opened multiples a few years ago. We might have opened a few current accounts to take advantage of special features or freebies, and we might have several savings accounts for different goals too. If we’re not completely on the ball with filing the paperwork, or updating our address with every single provider when we move, we can end up trailing multiple accounts in our wake that we’ve forgotten about entirely.

A savings account is classed as dormant if it hasn’t been touched in 15 years and the account holder hasn’t responded to attempts to get in touch. At that point, it may be given to good causes, but if you think some of it might be yours, you can still get in touch with the bank and reclaim it – at any time.

If you know the business you held money with, the best thing to do is contact them direct and ask. You’ll need to prove your identity, but then will be able to track down your account. If you’re not sure where your accounts are, you can try My Lost Account https://www.mylostaccount.org.uk. It’ll take up to 90 days for the financial companies to get back to you and let you know if you have an account with them. Then you need to contact them direct.

Once you’ve found any lost cash, some spring cleaning can help you keep an eye on it. You can close old accounts and move your money somewhere it’ll work harder for you. Don’t forget the FSCS limit which protects the first £85,000 held with each institution if something was to go wrong. Bringing your savings together shouldn’t mean busting this limit. Even if you have an awful lot of savings, you can still keep it all in one place with a cash savings platform, which lets you spread your money across accounts with different banks, and still see them all in one place.