Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to MEREN talks
Speaker 1: your Money. The personal finance edision of MEREN talks money.
Speaker 1: In these bonus podcasts, we talk about the best strategies
Speaker 1: for making the most of your money. Him Arin Sumset
Speaker 1: Web and with Me Senior reporter and Money to stilled
Speaker 1: off A. John Stapbeck, Hi, John, Hi, mil Okay, So,
Speaker 1: this week we're answering a verious personal question because it
Speaker 1: comes from one of our very own producers, Moses. What's
Speaker 1: on your mind this week about your money?
Speaker 2: All right? All right, I'll tell you, maren. So, I've
Speaker 2: been with my girlfriend for just over eight years. We
Speaker 2: are very committed to each other and don't plan on
Speaker 2: breaking up, but we question whether it's worth getting married
Speaker 2: or whether we should just keep things as they are now.
Speaker 2: We are renting a place at the moment and plan
Speaker 2: to eventually buy a place at some point in the future,
Speaker 2: but putting the romance of it all to one side,
Speaker 2: we're curious on what the practical benefits are of getting married.
Speaker 1: Okay, all right, interesting, I mean I'm mentioned at the
Speaker 1: very beginning. Am I allowed to ask you a question
Speaker 1: back before we start?
Speaker 2: Yes?
Speaker 1: Absolutely, I say, when you say we're questioning whether it's
Speaker 1: worth getting married, well, you know, I mean clearly you're
Speaker 1: not just talking about financial benefits. What do you mean
Speaker 1: by worth?
Speaker 2: Well, the way that we see it is that at
Speaker 2: the moment, we know that we want to be together
Speaker 2: for a very very long time. But getting married it
Speaker 2: seems like a lot of fuss, right, the whole wedding
Speaker 2: and like then having to like potentially like change names,
Speaker 2: all that sort of stuff. But is there like an actual,
Speaker 2: like practical benefit to it?
Speaker 1: All right? The first thing I would say is it
Speaker 1: doesn't have to be difficult. Registry office, keep your own names, okay,
Speaker 1: ten minutes done, dusted, Yeah, all good? So you know
Speaker 1: it could be could be really really easy. Don't need
Speaker 1: to have a twenty thousand pound wedding two hundred people? Yes, okay,
Speaker 1: So bearing that in mind, can we make it worth
Speaker 1: it for you if we assume you're only going to
Speaker 1: have a quick ten minute wedding at the registree office,
Speaker 1: No big dinner, no champagne, nothing, ten minutes in our
Speaker 1: job done.
Speaker 2: I'm very open to it.
Speaker 1: Okay, I'm very open to it. Excellent, right, John, are
Speaker 1: you an expert here?
Speaker 3: I'm not.
Speaker 1: John's married, by the way, so he's automatically an expert.
Speaker 3: Yeah, I I did see one thing I identify with,
Speaker 3: and I actually think a lot of men certainly I
Speaker 3: don't feel like I can speak form, but certainly for men
Speaker 3: I've talked to, the idea of being married was always
Speaker 3: quite attractive. For maybe the idea of actually getting married
Speaker 3: was a bit of our pain in the backseat. Because
Speaker 3: it is all very well seeing registry office do what
Speaker 3: you want to do. One of the marriage is that
Speaker 3: it involves a wider group of people than just you
Speaker 3: a lot of the time. So it depends on how
Speaker 3: your relationships are with various other parts of your family
Speaker 3: as to how happy they might be or might not
Speaker 3: be with the wedding that you want as opposed to
Speaker 3: the wedding that they wish you would have.
Speaker 1: This is this is not that kind of podcast.
Speaker 3: You've got to think about the emotional sides of all
Speaker 3: of these things. When it comes to finance. You know,
Speaker 3: I'm always gibbering about investment psychology of marriage psychologists.
Speaker 1: What you're telling me here, John, is that lots of
Speaker 1: men don't want to get married because admin and in laws.
Speaker 3: Basically yes, necessarily in laws. It might be their own
Speaker 3: families as well. But other than that, inheritance tax is
Speaker 3: probably the biggest, most obvious factor.
Speaker 1: I think we should start with the little ones. Yeah,
Speaker 1: and let's start with the little bits. Okay. The first
Speaker 1: one is there is actually a marriage tax allowance. There
Speaker 1: is a tiny little financial benefit to getting married if
Speaker 1: one of you is not using up their full income
Speaker 1: tax allowance. So you have to have one person who
Speaker 1: is not an income taxpayer and one person who is
Speaker 1: an income taxpayer, and the non payer can transfer part
Speaker 1: of their personal allowance, their personal income tax allowance to
Speaker 1: the taxpayer. They can transfer a maximum ten percent of
Speaker 1: the allowance, which means that there will be one two
Speaker 1: hundred and sixty pounds that goes tax free that wouldn't
Speaker 1: have been tax free otherwise, saving you a massive two
Speaker 1: hundred and fifty two pounds a year. Are we done here, Moses,
Speaker 1: I do it for you? Not enough? Not enough?
Speaker 3: Well, there's one small problem in that your spouse has
Speaker 3: to be a basic tax payer as well. Yes, so
Speaker 3: if the forty PA, then that's that's the window. Yes,
Speaker 3: that's one benefit.
Speaker 1: The next thing that I think is attractive about this
Speaker 1: and this again will only apply to a small number
Speaker 1: of people. Is that you can inherit a defined benefit pension, right,
Speaker 1: And we always talk about how wonderful defined benefit pensions are.
Speaker 1: But a lot of defined benefit pensions, not all, but
Speaker 1: I say the majority come with the ability for the
Speaker 1: surviving spouse, and they do it here to the word
Speaker 1: spouse pretty carefully. I don't think you can nominate anyone else.
Speaker 1: And if you aren't married on the death, then it's
Speaker 1: generally not inheritable. Remember that a pension is is controlled
Speaker 1: by the trustees as opposed to by you yourself, and
Speaker 1: this in this kind of case, but in the main,
Speaker 1: if you're married, you will usually get mostly fifty percent
Speaker 1: I think it is these days, sometimes two thirds of
Speaker 1: a dB pension. Now, not very many people have dB
Speaker 1: pensions anymore. But if you happen to have one, and
Speaker 1: you would like your partner to inherit some of it
Speaker 1: on your death and getting married is a really good idea.
Speaker 1: Now that's a big money one. Most as I don't
Speaker 1: think you have a dB pension, But.
Speaker 2: Yeah, no I don't. But I'm pretty sure that my
Speaker 2: partner is already assigned as being the recipient of my
Speaker 2: pension if anything happens to me anyway.
Speaker 1: Sorry, that's a defined contribution. Let's say that you had
Speaker 1: a defined benefit pension, one of those wonderful ones that
Speaker 1: John and I would like to have, that comes automatically
Speaker 1: every month, inflation linked, et cetera, et cetera. You don't
Speaker 1: have to do anything. The problem is that problem, not
Speaker 1: your problem. Very nice. If you were not married, that
Speaker 1: would die with you. If you were married, your lucky
Speaker 1: wife would get a large percentage of it.
Speaker 2: Okay, that's nicee right, that is great.
Speaker 1: This is not one for you, but maybe maybe one
Speaker 1: for some other people. What next the way, John.
Speaker 3: Sorry, they've been including several partnerships here, so it's several
Speaker 3: partners and married. I've got the same rules in case
Speaker 3: anyone's confused about that.
Speaker 1: And I would like to add something to that, by
Speaker 1: the way, which is, there is no such thing as
Speaker 1: a common law marriage. If you do not actually get
Speaker 1: around getting married and doing the admin for getting married,
Speaker 1: or you are not married, there is no such thing
Speaker 1: as a common oalpartnership that gives you the same rights
Speaker 1: as being married. It's a myth that will not go away.
Speaker 3: And I mean that's really important because so many people
Speaker 3: think that that the rules are slightly more complicated in Scotland.
Speaker 3: But even then it's not that complicated. It's basically the same.
Speaker 3: And if you want to get if you like, I
Speaker 3: think it's a cohabitation agreement. But even then, the amount
Speaker 3: the admin you need to do to get a cohabitation agreement,
Speaker 3: you might as well just go and get married, you know,
Speaker 3: I would suggest, but looking at it, but yeah, that's
Speaker 3: really important. Just because you've lived together for xt number
Speaker 3: of years doesn't mean that your spouse, so you're not
Speaker 3: your spouse is not entasled. And if you are living together,
Speaker 3: make sure if you own a properly then it should
Speaker 3: be owned jointly. If you are in a relationship in
Speaker 3: your name is not on the mortgage, then make sure
Speaker 3: you'll find out why that is and get to own
Speaker 3: the mortgage or you know, get led to the person.
Speaker 1: All right, thank you, John. Back to marriage, So we're
Speaker 1: not getting rid of people here, not where we're going, right,
Speaker 1: So an awful lot of this, I'm afraid, and awful
Speaker 1: lot of the benefits of being married are about death.
Speaker 1: So sorry, yes, but I want to move on to
Speaker 1: isis so you can inherit an iso from your from
Speaker 1: your spouse, so when they die, their ISA comes to
Speaker 1: you inside the wrapper, you inherit the rapper itself. So
Speaker 1: what it ends up with is you end up with
Speaker 1: a with a second allowance in the year of your
Speaker 1: spouse is deaf. Do you get your own twenty thousand
Speaker 1: allowance and then there is transferred over to you. So
Speaker 1: that's nice. That's a good one.
Speaker 3: That is good.
Speaker 1: John's looking doubtful about that. Do you think I've got
Speaker 1: that wrong? John?
Speaker 3: No, No, I think you know you're absolutely. I'm just thinking, yes,
Speaker 3: that is when that's what I hadn't thought.
Speaker 1: Okay, So I think that's that's a very good one.
Speaker 1: It's definitely a reason to get married. Inheriting and is
Speaker 1: isost the perfect investment rapper. The other ones are really
Speaker 1: again about the transfer of allowances. We'll come back to
Speaker 1: death in a minute. We'll come back to i T.
Speaker 1: John is athlete itching to talk about IHT. There's also
Speaker 1: the transfer of capital gains allowances. Right, So there's no
Speaker 1: capital gains when you transfer something from yourself to your spouse.
Speaker 1: If you transfer something to somebody else, you have to
Speaker 1: pay capital gains on the transfer. But between you and
Speaker 1: this is even before you're dead. You can transfer that
Speaker 1: allowance around. So if you have something that you want
Speaker 1: to sell and it's going to use all of your
Speaker 1: capital gains allowance, you can transfer some of it to
Speaker 1: your spouse and then they can sell that bit and
Speaker 1: use capital gains allowance as well. So that's a particularly
Speaker 1: useful one. Not the capital gains allowances are quite what
Speaker 1: they used to be, but nonetheless that is a useful
Speaker 1: advantage to being married. I can see most is really
Speaker 1: getting into this. You're nearly over the line, aren't you.
Speaker 2: Hey, I'm there, Yeah, I'm almost sold.
Speaker 3: It's all about the tax efficiency.
Speaker 1: All about tax ficiency, all right, John, iht.
Speaker 3: Yeah, I mean inheritance tax is just so everyone's got
Speaker 3: a three hundred and twenty five thousand pounds inheritance tax allowance,
Speaker 3: and if you're married and you die, everything goes over
Speaker 3: to your spouse, and that includes your allowance, so you
Speaker 3: don't have to do anything you'd have to do any admin.
Speaker 3: You don't even have to have a will. You should
Speaker 3: have a will, but if you don't, then they'll still
Speaker 3: get your allowance. And so that means that the autu
Speaker 3: might live six hundred and fifty pounds they can pass on.
Speaker 3: And if you've got a family home worth you know,
Speaker 3: at least three hundred and fifty pounds, then that's a
Speaker 3: million pounds in total you can pass it on. If you're
Speaker 3: not married, then you're gonna have to a you're gonna
Speaker 3: have to write a will to make sure that you
Speaker 3: use up your HT allowance when you die, otherwise it
Speaker 3: will it will die with you. And then your spouse
Speaker 3: doesn't doesn't automatically in orth not your spouse, you're the
Speaker 3: person you're living with, doesn't inherit your allowance, And so
Speaker 3: basically we can.
Speaker 1: Call that, we can call the person who isn't the
Speaker 1: spouse the non spouse. For the person.
Speaker 3: The non spouse. Yeah, so yeah, the non spouse doesn't
Speaker 3: automatically inherit any of your allowances. And so basically you're
Speaker 3: back to ay, You're back to a massive ADMIN nightmare.
Speaker 3: And there is also the you know, that's the fact
Speaker 3: that obviously life is uncertain, you don't know what's going
Speaker 3: to happen, and a lot of the time you get
Speaker 3: one of the reasons that things like the spousal allowance
Speaker 3: eventually was you know, automatically transferred. Was because you go
Speaker 3: all of these kind of somewhat tragic stories about people
Speaker 3: who died unexpectedly and then their partners left for a
Speaker 3: nightmare or kicked out of their house because they have
Speaker 3: an ict A liability there they shouldn't have had if
Speaker 3: they were better organized. The problem is if you're not married,
Speaker 3: you can end up in that position. So that's that
Speaker 3: is one very good reason to get married, and it
Speaker 3: gets ten times worse if you get kids, because if
Speaker 3: you get kids and again you're not on top of
Speaker 3: your ADMIN and you aren't married, then the situation when
Speaker 3: you die is much more complicated than if you are married.
Speaker 1: And it's different in Scotland and England right because this
Speaker 1: day state has different ways of dividing up you appropriate
Speaker 1: if you.
Speaker 3: Yeah, then ness to see laws are different. Don't know
Speaker 3: the exact details of how they're different, but it's still
Speaker 3: the point is it's like you, if you don't want
Speaker 3: the person you've had kids wait to be left high
Speaker 3: and dry in the event is something bad happening, you
Speaker 3: either need to make sure that you cross every t
Speaker 3: and do every eye sharpish, or you can get married.
Speaker 3: And there's an element of protection from that even if
Speaker 3: the WATS does happen.
Speaker 1: Yeah, right, So that's that actually, which I think is
Speaker 1: an excellent reason to get married. But I want to
Speaker 1: go briefly back to your earlier thing you mentioned earlier.
Speaker 1: It's about an expression of wishes on your pension. So
Speaker 1: most of us have a DC pension, a defined contribution.
Speaker 1: If we talk about this too much, I don't know, No,
Speaker 1: talk about pensions too much, isn't it with a DC.
Speaker 1: With a DC pension, you need to make it clear
Speaker 1: who you want the money to go to on your deaths.
Speaker 1: You need to fill in that. All any pension bride
Speaker 1: will have a form. You fill it in with your
Speaker 1: expression of wishes. And it's not that I mean, this
Speaker 1: is the interesting thing. It's an expression of wishes because
Speaker 1: legally it's not your decision to make because the pension
Speaker 1: funds are controlled by the pension trustees. But again, if
Speaker 1: you make that expression of which it wishes, it would
Speaker 1: be very bizarre for that not to happen. So make
Speaker 1: sure you do that on your DC.
Speaker 3: Yeah, And I mean, the other interesting with pensions is
Speaker 3: that it takes quite a long time for the process
Speaker 3: after someone dies because of learned from experience, for to
Speaker 3: then get passed on to their partner or it can
Speaker 3: do so. It definitely makes sure that the wishes are
Speaker 3: very very clear, because you want that ad meant to
Speaker 3: go as smoothly as it possibly can, and certainly in
Speaker 3: my experience, pension providers are not the fastest dealing with stuff.
Speaker 1: No, I can't think why the other reason to get married?
Speaker 1: It's all these endless studies showing you that married people
Speaker 1: are happier than people who are not married. Do you
Speaker 1: buy that, John, you look pretty happy. John's a happy guy.
Speaker 1: I'm happy.
Speaker 3: Yeah. I mean, assuming you've got a happy marriage. I
Speaker 3: always say, I say a lot of these these studies
Speaker 3: with a pinch of salts. I don't see how they
Speaker 3: can control. For the other fact, you know, there's got
Speaker 3: to be an element of self selection, and they have been.
Speaker 3: They approach people road speaking.
Speaker 1: Yeah, it might the happiness just being finding someone you
Speaker 1: want to be married to.
Speaker 3: I think it's more the couples that end up taking
Speaker 3: part in these studies are probably basically quite happy and
Speaker 3: not not wildly dysfunctional. You think they say that some
Speaker 3: people in bad marriages. Other than that.
Speaker 1: They don't ask divorce people do they.
Speaker 3: Well, yeah, exactly, it's a survivorship bias school, that is, it.
Speaker 1: Is a massive survivorship bias. Okay, so there we go.
Speaker 1: Don't get married. It will make you happy. The act
Speaker 1: of getting married in itself will not make you happy.
Speaker 1: There are some other factors doing good that do get
Speaker 1: married to avoid ADMIN and transfer your tax allowances around
Speaker 1: the place. Does that something's up?
Speaker 3: Yeah? And also that will make you happier not having
Speaker 3: to do as much admin.
Speaker 1: Yeah, any admin, you don't have to do it automatic. Joy.
Speaker 1: So Moses, when do the invitations arrived? John? And I?
Speaker 1: Already we're free for the next months or so?
Speaker 2: Right, really, okay, excellent, excellent? All right, Well I'll be
Speaker 2: passing by Patt and Garden on the way home, and yeah,
Speaker 2: my mind has changed. But no, I'm not sure that actually,
Speaker 2: like being married would make me any happier, because I
Speaker 2: don't think it would because I feel like, like I
Speaker 2: I already live a life in which I'm basically married,
Speaker 2: Because like, I feel like if someone wants to leave you,
Speaker 2: they can leave you anyway. And then I'm not sure
Speaker 2: that that like a piece of paper would really stop them. However,
Speaker 2: I do think that I do think that everything to
Speaker 2: do with the financial side of things. Should I pass
Speaker 2: away and leave her, then I think, yeah, that's actually
Speaker 2: like super important because statistically speaking, I probably will pass
Speaker 2: away before her, and if we do have kids, I
Speaker 2: don't want to want for her to experience any extra
Speaker 2: stress of sorting out all of the ADMIN and the paperwork,
Speaker 2: Like it's not worth it.
Speaker 1: And we can sell people anything come with John by
Speaker 1: telling them there's less ADMIN. It is. Actually it's quite
Speaker 1: a lot harder to leave somebody if you're married to them,
Speaker 1: because divorce is piled of ADMIN so much. Again, and
Speaker 1: so if we want to avoid ADMIN, get married, stay married.
Speaker 1: And that's the message from this podcast, which seems to
Speaker 1: be changing its focus slightly. Well, straight back to Pure
Speaker 1: Finance next week. Thanks for listening to this week's Marry
Speaker 1: and Talk to Your Money. If you like us show, rate, review,
Speaker 1: and subscribe wherever you listen to podcasts. Also be sure
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Speaker 1: marrynus W and John Underscore Steppic. This episode was produced
Speaker 1: by some SIDI production support from Moses and Thank You Moses.
Speaker 1: Sound designed by Blake Maples. Questions and comments on this
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