personal finance

Annie Shaw:Your money problems solved




Annie Shaw

/ 02 April 2019


The financial aspects of moving in together or buying house, plus can your wife inherit your state pension?

Question

I’m a widower and have met a lady I want to share my future with. We both own houses worth £200,000 and each have two children. Is there any standard arrangement couples like us make if one moves in with the other? What if we each sold our own house and bought another to live in together? How do we ensure our children don’t lose out financially on their inheritance? Does this all have to be formalised?

Answer

First, decide what you want to do – one move in with the other or both sell up and buy a new property. You will also need to decide if you are going to marry – because your legal rights may be different if you are not wed. A solicitor can explain how this will affect you. And you will need legal advice on how to arrange things when one of you dies. You need to ensure the financial security of the survivor, particularly if they wish to remain in a home owned by the deceased partner to whom they were not married, and how the children’s inheritances will be decided.

Five things to do before you move into together

It is extremely important that everything is set out legally, as things can go badly wrong if there are disagreements or misunderstandings later, particularly between heirs if you are no longer around. There may also be tax implications. If you choose not to marry now but decide to do so later on, you will need to review your arrangements, particularly in respect of your wills, as marriage automatically revokes a will unless you state in the will that you are making it in anticipation of marriage and don’t want the bequests to change.

Question

I’ve always believed that my wife could inherit my state pension. Is this still true?

Answer

You could never inherit a state pension as such, but there used to be some ‘inheritable features’ that don’t exist for new claimants. Until 2016, anyone who had not made enough NI contributions to qualify for a full pension could use their spouse’s to top up their own.

Paul Lewis on state pension changes

For people reaching state pension age now, only their own contributions count, unless they paid the lower rate ‘married woman’s stamp’ at any time in the past 35 years. If you paid into the State Earnings Related Pension Scheme (Serps), a spouse may still be able to inherit some of a partner’s entitlement, but only if she reached state pension age before 6 April 2016 or her spouse died before then. Either party may be able to inherit the ‘protected payment’ part of Serps, even where both reach pension age after April 2016. These transitional terms are far from simple. For details, visit gov.uk (search for ‘inheriting additional state pension’) or contact the Future Pensions Centre (0800 731 0175).

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.



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