What’s Love Got to do With It?
Martin Lewis looks into the benefits that can be had by being married...
Love is…. a financial advantage! I’ve been swamped with successes after my last column on the marriage tax allowance, which gives many couples a free £212. And it got me thinking … what are the other financial boons to being in a relationship you can make work for you?
So I’ve pulled together key twosome perks. With some you need to be married, but most allow anyone to, ahem, do it together.
Must be married or civil partners
For my first batch of tips, cohabiting doesn’t do it, only marriage (including civil partners) counts.
One of you a non-taxpayer, the other paying basic 20% tax? FREE £212
3 million couples are missing out on an easy, but under-publicised, tax break launched last April. It lets the non-taxpayer give £1,060 of their tax-free allowance to the taxpayer. This means £1,060 of income they were taxed on at 20% is now tax-free – a £212/year gain.
After my last column on it, a rather flattering Debbie emailed: “Easy, we’ve a backdated refund and saving of £200+/yr. Who needs to win the lottery when you’ve Martin Lewis?”
To do it, the non-taxpayer just needs to register at www.gov.uk/marriage-allowance. Apply now for this tax year, and you get it for every year going forward.
Full service breakdown cover, £42 for two
AutoAidBreakdown.co.uk gives home start and onward travel for £42/year – a corking deal. Yet this covers any car you drive, and any your spouse drives too, at no extra cost. It’s a pay and reclaim policy, so a recovery operator is sent out, and you pay them, then send your receipts in to get the cost back.
A joint policy can also be cheaper than two single policies with the AA and RAC. Eg, a joint RAC basic policy is £80, but a single is £50 per person. Go to www.mse.me/breakdown for more.
You can pass on your inheritance tax allowance
While not a nice thought, when you die everyone can leave an ‘estate’ (all property, savings, valuables) worth up to £325k without inheritance tax coming off it. Yet there’s never tax on what you leave to your spouse if they live in the UK, and if you die, their allowance rises by the amount you didn’t leave to others. So if you left them everything, they could leave £650k tax-free. Also if you die, ISAs can be passed over and stay ISAs too.
For ALL couples – married or not
These work for all couples (and sometimes even just friends), but most need a trusting financial relationship.
Get a £6,000 boost toward your first home together.
If you’re a first-time buyer, save in a Help to Buy ISA and you’ll get a 25% bonus on top towards a mortgage deposit, up to a maximum £3,000. And if you’re buying together, get one each, so that’s a maximum £6,000. If one of you has owned before, the one who hasn’t can still get one. You’re allowed to save £1,200 in month one and £200/month after. Even if you’re buying soon, it can still be worth it, as Laurence emailed: “Thanks to MSE, me and my partner both opened Help to Buy ISAs in December. Now we’re buying, we’ve got the min £1,600 each, and will get a total £800 bonus.” For my full guide to whether it’s right for you, and all the best buys go to www.mse.me/helptobuyisa
Get a YEAR’S 2for1 cinema together for
Those darling TV meerkats (or annoying little pests depending on your view) run a promotion where, if you become a Comparethemarket.com customer, you get access to 2for1 cinema tickets on Tuesdays and Wednesdays for a year. Yet it isn’t always your best deal. So here’s a trick. Get yourself a one day, UK-only travel insurance policy and even if you choose not to travel, technically you qualify. The cheapest I’ve found them at is £2. And then you’re due the 2for1s.
Together, you can save up to £60,000 TAX-FREE at 3% interest
Easily the best-paying savings vehicle for a decent whack is the www.Santander.co.uk 123 bank account. It pays 3% interest if you’ve £3,000 to £20,000.
On your own you can only have one account, but couples can have THREE – one each, one joint, covering up to £60,000. Plus from 6 April, the new personal savings allowance means tax-free interest for most people.
The account does have a £5/mth fee, but for most that’s covered by the cashback it pays on bills. As Andy emailed: “Took your advice. Got a Santander 123 joint account then opened individual accounts for my wife and me. Estimate I’ve generated £2.5k per year. RESULT.”
You need to ensure you pay £500/mth in to each, and set up two direct debits set up (if necessary, you could do £1/mth to a charity). For more tricks to max your interest, see www.mse.me/topsavings
Love is… 33% off train fares
The Two Together Railcard gives the two people named on the card a third off fares if travelling together (after 9.30am weekdays). It’s £30, so spend more than £45 each, even on one journey, and you save. If you’ve kids and buy tickets for them, the Family & Friends Railcard is an alternative. It gets you a third off train tickets for up to four adults when travelling together with up to four children aged 5-15 getting 60% off. Buy both at www.railcard.co.uk.
Unmarried? Your partner has no status under law – if you die they may not get the house or even the kids
Just a warning before I go. Even if you’ve been together 37 years and have 6 kids, if you die will-less, in some circumstances your partner may have no rights over the home. So it’s worth checking out if you’re in that situation.
Plus unmarried fathers may not automatically have ‘parental responsibility’ if the mother dies, unless the right forms have been filled in. (Fathers may have this if they were put on the birth certificate since 2003.) Check at www.gov.uk/parental-rights-responsibilities
Martin Lewis is the Founder & Editor in Chief of Money Saving Expert. To join the 10 million people who get his Martin’s Money Tips weekly email, go to www.moneysavingexpert.com/tips