This month’s column by My Baba’s resident financial expert Miss Lolly looks into the financial implications of cohabiting, and the things you need to be aware of.
Over 3 million couples are living together in the UK but aren’t married. My clients are often surprised that there is no automatic financial protection if things go wrong.
A recent study by AVIVA concluded that cohabitating couples are less financially prepared for the future than married couples. Here are some interesting stats that came out of their research:
- Those living together but not married have almost half the amount of savings and investments held by a married couple (£2,688 Vs £5,157)
- 74% of cohabitees do not have a will and 64% do not have life assurance
- 1 in 5 cohabitees believe incorrectly that that will benefit from their partner’s final salary pension scheme on death
- Only 4% of cohabitees have a cohabitation agreement (see below for more information)
Here are the facts that you need to be aware of:
- Cohabitees do not have the same legal rights as married couples. A really important consideration is that on the death of an unmarried partner, you will NOT inherit their property automatically. To protect yourself you need to write a will.
- If your relationship breaks down and you are not married, you are not entitled to a share of your partner’s assets, nor do they have to pay you maintenance as they would if you are married. Ideally a cohabitation agreement to protect yourself. This legal document puts down in writing who owns what and can help financial loss should the relationship breakdown.
- Cohabitees are much more vulnerable on the death of their partner than married couples. They do not get Bereavement Benefit and some pension schemes still will not pay out to unmarried partners. Therefore make sure that you have the right amount of life cover, critical illness cover and income protection
If this shocks you, please tell your friends!!
Lots of Love
Miss Lolly xx
Smart Financial Advice for Women
Whether you need help with mortgages, investing, saving for a rainy day, or just tackling your financial fears, Miss Lolly will give you unbiased advice based on the very latest financial wisdom. No jargon, no lectures – just the vital stuff you need to know, in user-friendly language. Get in touch via her website.