Money Box Live: Unmarried Couples and Their Cash

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1:32couples there who haven't married or civil partnered have no automatic legal rights, no matter how long they've been together. It's almost as if I just legally don't have a leg to stand on. Today we're asking what cohabiting means for your home, your money and your family, and what might change. Now joining me today to answer your questions and explain the rules are Hannah Sachs, specialist family solicitor at Brabner's law firm, joining me in fact in the Salford studio, and also Laura Souter, Director of Personal Finance at AJ Bell, speaking to us from London. Hello. Hello. Great to have you both with us.

2:06And Hannah, you've actually been part of this conversation for a long time because you're part of Resolution's National Cohabitation Committee. That's correct. And the change in the law is something we have been campaigning for for a number of years. For a number of reasons. And we're going to get into all of that. But before we do, let's hear from some of those three and a half million cohabiting couples and the conversations they're having around money if they did split up. And let's start with a couple who've been living together for 25 years. Yeah, we've had the conversation of what's to go where.

2:37So we have a joint account, so it'll just go down the middle. There's less financial protection because you're not married. You know, they'd automatically be your next of kin and they'd have legal rights with money in the bank and the likes, where ours is just verbal. We've lived together for the past 16 years. Five children, but just haven't had the money to get married. It's an uncomfortable question, but have you ever had any conversations about what would happen to your money if you were to break up? Everything's 50-50, to be honest. So we own our house outright, so we'd be settled. As long as the kids, I think we're both on the same page where the kids come first.

3:14I mean, he's smiling, so I guess he agrees. No one else will have him having five kids, will they? So I think we're quite lucky. How long have you been cohabiting? Four years. Have you had that tricky conversation about what might happen to your finances, to your shared assets, if you did split up? Well, we've got separate bank accounts. So I've just said whatever he's brought into the relationship, he can take. Whatever I put into the relationship, I can. And he's living in my house. So, and it's my house. It won't be our house. Well, thank you to everyone who stopped to speak to me in Warrington.

3:45Hannah, can you explain the current rules then for cohabiting rights in England and Wales? Well the short answer is there is very limited remedies available on relationship breakdown for unmarried families and there's a common misconception that you can be somebody's common law spouse and that's the idea that if you live together for a long time or you've got children together you would be treated the same as a husband or a wife if you split up and that's not actually the case. there's no single piece of law about what happens in terms of money on relationship breakdown if you're not married and you can't claim against your partner's pension or their savings and investments and there's no responsibility between cohabiting partners to support the other financially if they've done something like given up their job to stay home and look after the children and there are claims that you can make in relation to property but they come under property and trusts law that's not really designed with families in mind.

4:50And we might talk about some of that later on but Laura Northern Ireland also doesn't recognise any kind of so-called common law marriage but it is different in Scotland. Yeah there is the exception in Scotland the system slightly different so you can apply for court like financial provision after separation and also if your cohabiting partner dies without a will. But that is just the right to apply to a court for financial provision. It's not a guaranteed right and it doesn't say you'll automatically be given some money. And there also is quite tight timeframes around the time period that you have to apply for that after breaking up or after your partner dying.

5:28Thank you. Hannah, what is it that the government's consulting on then? What could change for English and Welsh couples? Well what the government is proposing is that there's a specific statutory framework for unmarried couples on relationship breakdown and that could potentially involve a right to a property transfer, a right to payment of a capital sum, a right to a pension sharing order and in some exceptional cases the right to maintenance. but the remedies being proposed are much more narrow than those available to married couples on divorce and the couple would have to meet certain qualifying criteria for the law to apply to them.

6:13So it's not just as soon as you move in suddenly bam here are all these rights? No that's right and there's talk of a three-year relationship qualifying also if you have a child together So it is much more narrow than if you're married or in a civil partnership. OK, well, what do married couples make of it all? I spoke to some who, shockingly, didn't get married just for the legal benefits. Did you feel it was important to be married for the financial protection? No, we kind of just were two fools in love who just wanted to have each other's surnames. I love that. Do you think that unmarried couples have similar kind of financial protections as married couples?

6:55I don't feel like they do, no, not that I'm aware of. It would be nice if they did, because especially in this financial era, I feel like couples, both of them contribute towards bills, both of them contribute towards rent, or you know, you have a lot of financial links. So you guys are newlyweds, recently married? Yeah, September last year. Well, congratulations on a first year, a successful year of marriage. Were you living together before then? We were, yeah, for about three, four years. I told him he wasn't going anywhere, so I made it legal. Do you think that unmarried couples who perhaps have been living together for a few years should have similar rights to married couples when it comes to breaking up the finances?

7:33Well, yeah, if they both put money into stuff, it's not fair just because they're not married that one of them gets it all and the other one has to start again from nothing. So it should be fair enough. Well, as Hannah said, there are still differences under these proposed rules for cohabitors compared to married or civil partnered couples. And the Department for Justice says the framework would give cohabiting couples distinct sets of rights from married couples, helping to preserve the institution of marriage. Hannah, a lot of those unmarried couples I spoke to in Warrington said they had a verbal agreement about what would happen if they split up.

8:08At the moment, before these rules are consulted on and brought in, is that enough to keep you safe? no um it is possible to make claims in relation to um property but generally um the sort of evidence that we look for in relation to those claims is written evidence it can be on the basis of promises made um about gaining an interest in a solely owned property um but that's a much harder case to run. It's not romantic, is it? But we are Moneybox on Radio 4. We're not Love Songs with Michael Ball on Radio 2. So we have to think about this stuff. Do we know when the changes might come in, the changes the government is proposing?

8:50There's no timescale at the moment. We are waiting for the government's response to the consultation. And, you know, change is long overdue. And the longer that that goes on, the more people that are potentially left in a vulnerable position so we hope that they respond quickly. Somebody has sent us a message on WhatsApp. G Logan says I think a common law marriage system should be re-implemented after five years cohabitation. All the benefits of marriage should be given to a couple who applies for it. Thank you for your thoughts. We've actually spoken to somebody who contributed to that government consultation not after a breakup but after their partner sadly died more quickly than had been expected.

9:32This is Fiona, which is the name her partner knew her by. We used to go to the local theatre and we'd dress up in our Victorian garb. We liked doing that. And I've got a picture of us standing on the steps of the theatre in our finery. Shared interests and a shared home. And you actually planned to get married as well, didn't you? Well, we'd mentioned it a year or two before, but we were just so busy doing other things and neither of us was particularly well I certainly wasn't religiously minded so we just let it go as something that we get round to but then in early July of 2024 Stephen he'd not been well but nothing was expected to happen and he just said to me look why don't we just get married and so we put our plans in train you know like the registry office who would use as a celebrant and 10 days after he asked about getting married and I said yes, he died.

10:38It didn't happen for us. That's a very, very difficult ending to a love story. Tell me about that time when Stephen was poorly as well and the care that you provided. He wasn't a great one for attending medical appointments and basically I made sure he did every single one and I went with him to every single medical appointment and he didn't miss any of them. We used to do shopping together, but if he didn't feel like it, then I'd go out and do it and I'd do the gardening and I'd do most of the housework. Clearly, this was a very, very busy few years for you and there would have been a lot of things on your mind And I suppose finances might have been quite a long way down the list during that time.

11:26Did you have any conversations about what would happen to your finances? He said, look, once we get married, then we can make our wills. And he said to me, the important thing for me is that we get married. And I thought, fine. I didn't expect him to die imminently and nor did he. And now you're worried that the life you built together and your home could potentially be lost. Yes, yes. I mean, they're in the room with me now. I've still got the two dogs that he had. They've lived in this house longer than I have. and when I consulted the solicitor he said it comes down to the law not having kept up with modern life.

12:16We'd made this home together and I want to stay here. I think Stephen recognised that there's no rights under common law so I think that was... He never said so explicitly but I think that was part of his thinking. You know, he said, let's get married because he knew that he probably had less than a year. We knew that we ought to do something, but it wasn't at the top of our priorities. Our priority at that time was getting Stephen better. You actually contributed to the government consultation on co-operation. Why was that important to you? What did you want the leaders of the country to understand?

12:57You can have a deep and committed relationship without having a bit of paper signed by a registrar who in almost every case will be a stranger. It's just a form of words and a piece of paper signed and put in records and that doesn't deepen the relationship that we had. What do you think of your situation now? Well, it's almost as if I just legally don't have a leg to stand on. Such legal remedies as are available guarantee nothing. Thank you to Fiona for sharing her story. Laura, it's really difficult to hear, isn't it? As well as losing her partner, there is then all the really awful admin to go through.

13:42And if you're unmarried and there's no will, it's even more complicated. What might happen to a person's estate then? yeah just such a sad situation and then just made so much more stressful by the lack of clarity and i think so many people just aren't aware of the lack of protections for them if they're not married um so if there's no will uh and one cohabite dies one partner dies um then the other partner won't automatically inherit their estate it goes through the kind of laws of intestacy so it'll go to children if there are any and then if not it goes to parents and then siblings and so that person that they may well have shared their life with for decades wouldn't factor into that process.

14:24And there's so many other things in terms of who owns the property, who owns assets, pensions, all of these things. Unless you've got a will in place or a cohabitation agreement, you don't automatically have rights to them. Hannah, is there any claim an unmarried person can make on their partner's estate? it's possible in certain circumstances to make a claim against the estate as a former cohabiting partner um but it it depends on the circumstances and and so the really important thing i suppose the important takeaway is that um if somebody unfortunately finds themselves in this situation it's really important to take specialist legal advice from um a private client solicitor about what your options are in your particular circumstances.

15:11And Fiona was clearly devoted to Stephen. They had planned to get married. Would the changes that the government has proposed help people in her situation? Well, what the government is proposing essentially is that there would be automatic rights similar to the intestacy rules, but involving cohabiting partners as well. So potentially, yes. So potentially adding them to the list of people who would be entitled. Laura, if you're married or civil partnered, you are effectively exempt from inheritance tax, aren't you? The wealth passes from one person to their spouse on their death. The new proposals from the government do specifically exclude making that the case for couples who aren't married.

15:53Yeah, and that's one of the key distinctions between the new proposals and full marriage. The new proposals aren't saying that those people who've cohabited for a certain amount of time and meet the criteria get the same rights as married people. And inheritance tax is one of those key areas. So yes, if someone dies, they can pass their assets to their wife, husband, civil partner, and that will be free of inheritance tax. That isn't the case if you cohabit. So even if you have a will in place and you state that you want your cohabite partner to inherit all of your assets, it may be that you have to pay inheritance tax on that or the estate does if it's over the normal nil rate ban threshold.

16:34So that is, I mean, tax is not a romantic reason to get married, but it is a practical reason. And for people with larger estates or very valuable properties, it can be quite a compelling reason. You certainly wouldn't be the first person to get married because of tax reasons. Investing with Schwab is like spending a Saturday at a great farmer's market. You can fill your reusable tote with a bit of everything. Maybe you go for some free range, self-directed investing. Or perhaps you pick up a few farm-fresh trades while you peruse. You can even get help from a dedicated advisor. That's full-service wealth management.

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18:22her Joanna. She and her partner have split up but they're still living together and they have children and her words are being spoken by one of the team. I was with my ex-partner for 24 years and he wasn't very nice to me in all of that time. Looking back I didn't see it at first. I think I've been financially controlled. When I finally decided enough was enough it's come to the point where I could end up homeless. I could end up with nothing. I didn't work. I took care of our three children alone whilst he lived his life and had a six-figure job. Now it's to the point where if we're not together I have nothing.

19:00He didn't want to marry me because he knew eventually I would see the real person and didn't want to lose his money. I don't even want half. I would just want a home for me and my two younger children to live in and just get on with the rest of my life. I went back to work finally against his wishes, which didn't go down very well. But what I earn is not enough for me to buy somewhere on my own. I think for this law to change will make a massive difference to a lot of people's lives. Thank you, Joanna, for that. She's also told us she's getting legal advice and support at the moment. Hannah, for you, people like Joanna is really what this new framework is all about.

19:41Absolutely, because it's often the woman who may have stopped work to look after children that is left in the more financially vulnerable position on the end of unmarried relationships that are like this. This is precisely the scenario that the consultation and the campaigning has been trying to protect people against. and what I would say is domestic abuse legislation that exists applies whether you're married or unmarried so it's always possible to take advantage of that if you're in an unmarried relationship and the other thing that our caller is perhaps going to be looking at when she consults her solicitor is it's possible to make claims on behalf of a child in an unmarried relationship and that can include things like provision for housing and there's also child maintenance and that is a payment every month and but the difficulty with that obviously is it's financial provision for the child and not for their partner themselves yes and so wouldn't secure any kind of long-term stability for them um laura aspects of what joanna was saying there meet the definition of economic abuse don't they can you outline some of the warning signs that financial power in a relationship has moved beyond simply having different approaches to money and have become abusive.

21:07Yeah, definitely. And so I think it's anything where your partner is really controlling elements of the money. And so that could go from the extreme of kind of forcing you to take out debt in your own name that they then spend, or it can be much simpler in terms of encouraging you to get your pay paid into their bank account. They may say, oh, it's just simpler to organise things or controlling the money you have. So, you know, giving you an allowance or an amount of money to spend rather than you having free access to your own money. And so I think it can really spread across the spectrum. And there might be some people out there that just think, oh, well, my partner takes care of the finances and it means I don't need to worry about it.

21:46But I think they need to really think about whether they're taking care of it from a nice point of view and whether they still feel like they've got access to the money or whether it slipped into financial control. We've had another email that says, I owned my home since more than 10 years before I met my former husband. It was never a family home. It was my house and he moved into it. Before we married, he lived with me only on and off. Just two years after we married, he filed for divorce and told me I would have to sell my house as part of the settlement. Hannah, that's an interesting email, isn't it?

22:15Because currently, if you're married and then get divorced, you may have to hand over some of your wealth or divide up some of your wealth. some people will be concerned then that under these new rules that have been proposed that could just happen to couples after a certain amount of time. And that's why that is possible and that's why one of the proposals is that you will be able to opt out of these new laws when they come in. The idea being that you would go and enter into an agreement with the help of the solicitor so that the law doesn't apply to you but that it has to be that way around really to rather than it being an opt-in system to protect the vulnerable members of society who perhaps don't have the funds or the awareness to enable them to go to a solicitor to opt in so the fact that the proposals are that it's opt out is actually a big win for and campaigners for change.

23:18And the Department for Justice says that the opt-out approach is so couples can keep their finances separate, but it's about ensuring vulnerable people, including children, do not miss out on important protections. But we've had a lot of people getting in touch about exactly that. Alison says some couples choose to cohabit without forming legal bonds. This is my case. We both have independent finances and want to keep it that way. Now it seems we'll have to have some sort of prenup equivalent just to retain our current situation. And here's Louise. We've been together, my partner and I, we've been together over 10 years.

23:49We've lived together over five years. We're not particularly interested in getting married. And part of the reason is because we want to keep our finances and our assets completely separate. For us, we don't want children. And we've made it very clear that in both our cases, it's our parents who are our beneficiaries. Now, the one rule we do have when we're communicating with each other is that any financial agreement or anything we do to, you know, even if it's just day to day running of the households, we put it in an email, like we write it down. So that's one of the rules we have is everything goes in an email.

24:30The admin of a romance is quite something. My worry is that I would have to take some kind of action. such as going to a solicitor, drawing up an official financial agreement, how would we opt out of automatic assumptions of how would we manage that in the event of a relationship breakdown? Louise, thank you very much for that. I have to say the admin of romance sounds like a really dreadful self-help book, doesn't it? Laura, it's interesting. Hannah sort of outlined that you would need to proactively go and opt out. And that could get really complicated, couldn't it? What about financially unequal relationships where one partner wants the extra protection because maybe they've given up work to raise children, but the other one wants to opt out of any new rights?

25:19What happens there? Yeah, it's tricky. And I think that really comes to the nub of why lots of people don't tackle this is because it involves some quite awkward conversations. And if you haven't, I mean, clearly, Louise, they've been very transparent, very open communication about their finances. But lots of couples either don't address it or just don't want to talk about it, bury their head in the sand. And so I think what this proposal, if it comes through in its current format, will force a lot of couples to do is to really just open up that conversation. And for some people, that is going to be quite uncomfortable and they're not going to see eye to eye.

25:52But that's the case with lots of things in a relationship. And lots of people will have to navigate their way through that. A lot of people don't like talking about money. We love it here at Moneybox Live, but not everybody does. Here's the other side of this then. We've had an email that says, I personally am worried about this. I've worked, now semi-retired. My partner has not worked and doesn't contribute. I have a will that excludes him. We have no biological children together. He doesn't pay bills or contribute to bills. Hannah, they've got a will that excludes their partner. How do wills play into all of this?

26:22Well, a will is there to determine what happens if somebody dies. but obviously it doesn't impact the situation in terms of a relationship coming to an end so at the moment if the caller is not married then sort of from her perspective in terms of protecting her wealth and her assets she's in the best position really and then if the changes come through then she's going to be one of those people that needs to have a difficult discussion as Laura said. Laura, what should a couple put in a cohabitation agreement? And if they can't afford legal support, can they put one together themselves? So to take that second part first, it's a bit like writing a will.

27:12So there's forms out there that you can fill in, there's kind of templates that you can fill in and do it without the legal advice is obviously cheaper. However, it's much more likely to not be questioned in court and to be held up if you did separate. or if one of you died, if you've got that kind of legal advice. So it's definitely worth looking at the cost of that and seeing whether that's an option for you. And I think people just really need to think about, have these open conversations and then think about things like pensions, think about who owns which assets and where they're going to go in the case of a split.

27:51Think about any children and, you know, maintenance for those, what's going to happen to the main home. there's lots of different kind of elements to it that people need to consider. Now that doesn't mean to say that you need to include absolutely everything in that cohabitation agreement. It's similar to with wills. Some people just get put off because they think this is too monumental a task. So if you want to tackle the kind of basics of the property children you could start with that and then kind of build out from there. Hannah, any final tips for couples moving in together with no immediate plans to tie the knot?

28:23My key takeaway there really is to consider a cohabitation agreement. As we said, it doesn't sound very romantic and it might seem like a big undertaking. But at the end of the day, what it could potentially do is save you a lot of money on lawyers if there's going to be a dispute further down the line if you do split up and a lot of stress. And it also gives you certainty about what's going to happen whilst you're in your relationship. it. Yes, but it can be hard, can't it? Relationships are joyful, messy, rarely, rarely entirely rational, but you think people just have to put that to one side and do it.

29:00Well, that's all we've got time for in today's Moneybox Live podcast. Thank you to everybody who took part. And thank you to Laura Souter from AJ Bell and Hannah Sachs from Rabner's Law Firm. Next week on the pod, I'm going to be looking at the cost of care and what Andy Burnham's plans might mean for your money and for your plans. As ever, we want your thoughts, your stories and your views. You can email moneybox at bbc.co.uk. You can send a voice note or comment to Moneybox on WhatsApp. The number is 033 06783 183. We read and listen to every message. In this podcast, the producer was Sarah Rogers, the studio manager, Olivia Michelli.

29:38Our editor is Jess Quayle. I'm Felicity Hanna, and this was a BBC News Money and Work production for BBC Sounds. 25 years on from the deadliest terror attack in history, why are thousands of grieving families still fighting for answers? In early 2000, two young Saudis arrived in San Diego. They'd never been to America, spoke almost no English, and had no idea how to open a bank account or rent a flat. Within weeks, they'd done all of it. Twenty months later, they hijacked a plane and crashed it into the Pentagon. Jane McMullen investigates the hidden story of a man who helped two of the hijackers and reveals a story that the U.S.

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