The government’s decision to extend civil partnerships to heterosexual couples has been deemed a 'no brainer' by financial services experts.
Prime Minister Theresa May announced yesterday (2 October) that heterosexual couples will be able to be legally safeguarded in the same way as couples that are married.
Civil partnerships were introduced in 2004 in order to give same sex couples legal protection, tax allowance and rights to split assets if the marriage ends.
However, in June of this year the British Supreme Court found that civil partnerships discriminated against heterosexual couples by allowing them only to marry and not enter a civil partnership.
Helen Morrissey, pension specialist at Royal London, said the announcement was a step towards ensuring cohabiting couples, who don't wish to marry, will be entitled to the same rights as married couples.
She said: "It is great news that heterosexual couples will now be allowed to enter civil partnerships and enjoy the same legal safeguards as those afforded to married people.
"Not everyone wishes to marry and it is important that the government recognises this and offers cohabiting couples the option to enter a civil partnership instead.
"Cohabiting couples can live together for many years and raise families together and yet if one partner died the surviving partner could find themselves facing severe financial hardship as they find they are not entitled to the same pension death benefits or inheritance tax treatment for instance.
"This move is an important step forward and will bring peace of mind to many cohabiting couples."
Recent statistics from the Office for National Statistics (ONS) showed that 51 per cent of those entering a civil partnership in 2017 were aged 50 plus, compared with 19 per cent in 2013.
Earlier this year Royal London called for cohabitees to have the same tax treatments as those in civil partnerships or marriages, stating the number of cohabiting couples in the UK during 2016 has grown to around 3.2 million.
Rachael Griffin, tax and financial planning expert at Quilter, said: "The move by (prime minister) Theresa May to extend civil partnerships is a no-brainer and an easy win during what is undeniably a tricky time for politics.
“Something that becomes of increasing importance as people get older and want to organise their estate.
"For instance, transfers between civil partners are not subject to inheritance tax, so if the first partner to die leaves their entire estate to the other there is a strong chance that none of their £325,000 nil-rate band has been used and could be transferred to their partner.
"Plus, the new residence nil-rate band, which will be worth £175,000 per person by April 2020, is also transferable between civil partner. These allowances combine to mean partners could leave up to £1m without triggering an inheritance tax charge.
"Importantly, this may mean that National Insurance bereavement benefits will be extended to these couples. Today, cohabiting couples miss out on thousands in bereavement help so this is will also be another reason for them to enter into a civil partnership."