New legislation is being considered which would allow heterosexual couples to enter into civil partnerships. The Bill, which is currently going through Parliament, could result in a significant boost to the financial benefits cohabitees are entitled to.
While Scottish law recognises cohabiting in some circumstances, UK law is behind the times when it comes to protecting a growing number of cohabiting couples. This means that those who are married or in same-sex civil partnerships benefit from many advantages that are not available to cohabitees.
Should heterosexual couples be able to enter a civil partnership, a new group of people would be entitled to these benefits. This could include:
- Tax allowances
- Inheritance tax breaks
- Bereavement benefits
- Any inheritance passing to the surviving partner
In addition, the new legislation could also positively affect pension benefits.
Pension benefits for cohabiting couples
At present, couples who are not married or in a civil partnership have no automatic right to inherit a pension from their deceased partner. However, if the law is changed, this could be of enormous help to older cohabitees who reached pension age before April 6, 2016, and fall under the old state pension system.
Should the reforms take place, and these people decide to become civil-partners, they will see improved pension rights after their spouse dies. Ultimately, this could see a pensioner’s income boosted by an estimate of £2,500 per year.
Defined pension schemes
While increasingly rare, defined pension schemes have the provision to pay a surviving widow, widower or civil partner. However, they don’t currently recognise cohabitees.
Whilst the majority of cohabiting couples are in their twenties and thirties and don’t have such schemes, for those that do, reform in this area would allow opposite-sex couples to register as civil partners and stop them from being treated differently in the eyes of the law.
With an estimated 3.3 million unmarried cohabiting couples in the UK, speak to one of our expert team, and make sure that your rights are protected.
Contact us today by calling 0800 019 4557 or email email@example.com.