What are the financial pros and cons of remarrying?

This article is part of
Guide to financial advice for later-life marriage

What are the financial pros and cons of remarrying?

Marrying later in life to secure one's financial future may be prosaic but it is also practical in many ways and there are many advantages to doing so.

Among the advantages are the companionship, friendship and sense of belonging that has been known to combat loneliness.

Jane Finnerty, joint chairwoman of the Society of Later Life Advisers, points out there can be better health advantages as a result, especially for men as they are cared for better.

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This is not just anecdotal conjecture; in 2010, Harvard Medical School published a research paper indicating there were many reasons why married men lived healthier, longer lives.

It stated: "A major survey of 127,545 American adults found that married men are healthier than men who were never married or whose marriages ended in divorce or widowhood."

The Harvard Medical School's study, Marriage and Men's Health, also cited peer research from the Framingham Offspring Study. Harvard's research paper stated: "Marriage is truly heartwarming. Scientists evaluated 3,682 adults over a 10-year period.

"Even after taking major cardiovascular risk factors such as age, body fat, smoking, blood pressure, diabetes, and cholesterol into account, married men had a 46 per cent lower rate of death than unmarried men."

Although when presented with these statistics, my father suggested this would come as a disappointment to men who hate their wives, he agreed (but only when my step-mother glared at him) that companionship later on in life makes for a less isolated, mutually beneficial arrangement.

Advantages to later-life marriage

But the advantages are not merely health and happiness related.

Many people, according to Ms Finnerty, marry because "two live cheaper than one".

She also states: "There are better pension rights potentially, and perhaps some inheritance tax planning for some."

Charlene Coulbeck, senior paraplanner at Informed Financial Planning, states: "Apart from the expense of the marriage itself, generally speaking, marrying has mostly financial advantages."

Tax benefits

Those eligible for married couples allowance can find their tax bills reduced by £336 to £869.50 a year. There are also potential benefits available from the state, such as bereavement payments, bereavement support payment or widowed parent's allowance, depending on circumstances.

But as Keith Richards, chief executive of the Personal Finance Society, points out, marrying can provide couples with even more tax benefits that would not be available to singletons.

These apply to income tax, capital gains tax and inheritance tax (IHT). In a nutshell, Mr Richards outlines these below: 

  • Income tax – married couples can apply to transfer 10 per cent of the income tax personal allowance from one to the other. For those couples where one person does not use all of their personal allowance at the moment the benefit will be up to £238. For those born before April 1935, they can take advantage of the Married Couple's Allowance.
  • Capital gains tax (CGT) - Assets can be transferred between spouses. Therefore, a married couple can realise gains of £23,400 before capital gains tax is applied (2018-19).
  • Inheritance tax (IHT) - Married couples can pass assets onto their spouse on their death without paying inheritance tax. Furthermore, if widows/widowers remarry, with clever planning potentially four nil-rate bands may be available.

Ms Coulbeck also cites the transferable income tax allowance, but caveats this: "The actual money saved is quite low in reality."

With regard to CGT, every individual has their own allowance, currently £11,700 a year. Gains realised within that amount will not incur CGT, while gains over that will incur CGT at 10 per cent or 20 per cent, depending on an individual's tax rate.