Mid-life marriage traps that might deny your youngsters an inheritance
Getting married in midlife can be ‘a full injection of joy and fun’, just as comedian Miranda Hart told the world following the revelation of her own nuptials at 51 to Richard Fairs, a 60 year-old divorced father of two.
But middle-aged lovers should clean their rose-tinted glasses before tying the knot.
In the worst cases, you could lose your pension; someone else’s children could inherit your money; your credit score could be damaged, and your state benefits may be cut.
Even more tragically, your Mr Right may turn out to be Mr Wrong – and that might mean all the financial woe involved in going through a divorce.
Here, Money Mail looks at seven common pitfalls you need to be aware of – and how you can protect yourself before you leap.
New chapter: Getting married in mid-life is usually a cause for celebration – but there are many financial pitfalls to be aware of
1. You could lose your private widow’s pension
If you are widowed and receive your deceased spouse’s pension, it could be snatched away from you when you remarry.
This affects members of some older public sector schemes in particular. For example, the Teachers’ Pension Scheme rules state: ‘Widow, widower and civil partner pensions payable in respect of a member who retired from a date prior to 1 January 2007 will remain liable to cessation on the recipient’s remarriage, civil partnership or cohabitation’.
Other public sector schemes have similar rules. ‘This is a terrible state of affairs and effectively penalises older women who are most likely, statistically, to be in receipt of a spouse’s pension,’ says Penny Cogher, pensions partner at law firm Irwin Mitchell.
She adds: ‘There was so much public outcry that the law on this was changed for Army pensions but, sadly, not for other public sector schemes.’
She adds that individuals should check the position of their own scheme to find out if there will be any financial consequences should they remarry.
Go to your pension scheme’s website to read the rules (every scheme is different) or phone the pension scheme’s administrator. You can use the government website to track down contact details if you know the name of the employer or the pension provider gov.uk/find-pension-contact-details
2. You could get a smaller state pension
Widows and widowers can sometimes inherit an extra payment on top of their new state pension from their deceased spouse.
You may be eligible if you got married before April 6, 2016 and either your partner reached state pension age before this date, or died before this date but would have reached state pension age on or after it.
Newlywed: Comedian Miranda Hart got married for the first time at 51
However, if you remarry or form a new civil partnership before you reach state pension age, you will lose your entitlement.
Remarrying post-retirement age does not affect any state pension you have already started to draw as a widow or widower.
Steve Webb, former pensions minister and partner at pension consultants LCP, says: ‘Those who draw a state pension as a widow or widower can remarry without this affecting their entitlement. But those who were set to receive some inherited state pension at retirement from a late spouse will lose that right if they remarry before pension age’.
Contact the government Pension Service on: 0800 731 0469 to check your specific circumstances.
3. You could lose your benefits
If you get married or remarried, register a civil partnership or live with someone as a couple, any means-tested benefits you receive, such as Universal Credit, Pension Credit, Housing Benefit or Council Tax Support, may be affected.
Your partner’s income is included as part of an overall assessment of your household’s eligibility.
Notify the office that pays your benefits as soon after your marriage as possible.
If you receive maintenance from your ex-partner for yourself, that may cease but maintenance for your children (also called ‘child support’) won’t be affected.
4. Your children could be denied their inheritance
When you get married, your new spouse is automatically given rights to all of your personal property and belongings on your death, plus the first £322,000 of the estate, and half of the remaining estate.
Clare Moffat, pensions expert at Royal London, says: ‘In England, Wales and Northern Ireland, there is a general rule that a new marriage will revoke any existing wills.’
Make sure that you make a new will to reflect your wishes.
Married couples often write so-called mirror wills – which are identical wills that leave all of their estate to each other. However, if either of you come into the marriage with children whom you would like to inherit, you will need to make provisions in your will.
Otherwise, if you make a new will leaving everything to your new spouse, should you die first, they could then leave everything to their own children, leaving yours with nothing.
Go to gov.uk/inherits-someone-dies-without-will to check.
The rules are different in Scotland. Go to: gov.scot/collections/what-to-do-after-a-death-in-scotland
Trust: If you make a new will leaving everything to your new spouse, should you die first they could then leave everything to their own children, leaving yours with nothing
Private client partner Lisa Spearman at chartered accountants Mercer & Hole says: ‘It’s critical for there to be full and clear discussions among all the family and then make wills to reflect your wishes and make sure you understand what is going to happen.’
Harriet Errington, partner at law firm Payne Hicks Beach, adds an additional warning if you help out your partner’s children. ‘If you start to provide financial support for your partner’s children following your marriage, and die without making adequate financial provision for those dependants, your estate could potentially be vulnerable in respect of a claim under the Inheritance (Provision for Family and Dependants) Act 1975,’ she warns.
If you want your spouse to be looked after in their lifetime, should you predecease them, but want your wealth to ultimately pass back to your own children, you can specify this in your will.
You will need the advice of a solicitor to do this correctly.
Another option is a prenup – an agreement made before marriage on how your finances will be split should you separate.
These are not legally binding, but as long as you both get independent legal advice, and explain why you want to divide the assets and debts this way, a divorce court will consider them if the marriage breaks down.
5. Your credit rating could be hit
If you open a current or savings account – or any other financial product – with your new spouse, your credit records will be linked. That means that if your partner has debts, misses payments or makes other financial mistakes,
it could affect your ability to borrow.
Your credit records are not automatically linked when you marry, only when you take out joint financial products.
But Spearman recommends older couples to have at least one joint account to make life easier for the surviving partner when the other one dies.
Widows and widowers can inherit an extra payment on top of their pension from their deceased spouse. However, if you remarry before Pension age, you will lose your entitlement
‘On death the bank accounts of the deceased are frozen until probate is granted,’ she says.
‘Joint accounts however can usually be accessed by the survivor. It can make sense then to have at least one joint account with cash in it to pay say six months’ worth of the usual household bills in the immediate post death period.
When you are recently bereaved, not having any cash is one thing you should not need to worry about.’
6. You could pay more tax when you sell your home
Homeowners pay capital gains tax on any profit that they make when selling property – unless they are selling the home they live in. However, married couples only have one exemption between them whereas two single people have one exemption each.
It means that, for example, two people in a relationship who both have their own home could each sell their property without incurring capital gains tax.
But if the couple were to get married, they could only sell one of the properties without incurring capital gains tax – the other would be treated as the couple’s second home and therefore liable to capital gains.
If one of you plans to sell soon, it may be worth doing in advance of the wedding. But this is a complex tax area and you should take professional advice before making any changes.
7. Your online fiancé could be fake
Later life marriages have doubled in 20 years with 82,912 people over 50 (including some 1,000 over 80s) marrying in 2022 in England and Wales.
A year later there were 4,160 cases of romance fraud recorded with £68 million stolen according to UK Finance.
Romance scammers love-bomb older victims in particular – expressing their undying love, showering them with compliments and pretending to be interested in the minutiae of their lives.
‘Often there’s a gang of criminals working around the clock, so they keep up a flow of messages at all hours of the day and night,’ warns Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown.
She adds: ‘You should also be wary about revealing a lot about yourself, or turning on your webcam. If at any stage they ask for money or personal details, this should ring alarm bells. Don’t part with either.’
