10th July 2018 at 2:41pm
What’s a typical modern wedding?
Perhaps surprisingly, the wedding that 18 million of us in the UK tuned into earlier in the summer (yes, Prince Harry and Meghan Markle’s) was a pretty good example, at least in some ways.
They’re both in their thirties. Meghan’s a divorcee with her own successful career and wealth, marrying for the second time.
More people are marrying again, later
A public event like this reveals how times have changed, as the average age of marriage is rising.
And a really interesting trend is that more people are remarrying quite a bit later.
ONS figures show 32,395 over-55s remarried in 2015, an astonishing 26% jump in a decade.
But for those marrying a second, or even a third, time around, there can be more to think about.
How to plan for the next stage of your life
Getting remarried is a new beginning which can mean blending families, children, money and houses into a relationship.
As Jamie Jenkins, life savings expert at Standard Life, explains, “it’s likely they’ve built up life savings and may have grown their family along the way too. It’s even more important they’re properly prepared when it comes to safeguarding their family’s future”.
Weddings are often wonderful, moving occasions that people never forget.
Getting things in order in the background means you can relax, knowing these are taken care of.
Money matters: 7 things to think about doing
1. Talk about about your finances, together
A quarter of couples aged 40 or more never discuss what they’ll live on in the long term, according to This is Money. Start off on the right foot by being completely open and talk about money. It’s likely you’ll both have built up some wealth along the years. Tell each other about any debts as well as savings and assets and agree how you manage them. Honesty is the best policy, as the saying goes.
2. Get some guidance… before you say ‘I do’
Modern families come in all shapes and sizes, which can make financial planning more complicated. There may be children, ex-spouses, savings, pensions and properties to factor in.
It can make sense to get some advice before the big day from a lawyer and financial adviser.
3. Twice as nice: double up on tax breaks and grow your savings
There are a number of ways you can make the most of tax breaks and allowances as a married couple. Again, an adviser can help you make the most of them, including inheritance tax planning.
On the savings front, together you can save up to £40,000 into tax-efficient ISAs each tax year.
As a couple, your pension annual allowance could double up, letting you jointly save up to £80,000 tax-efficiently, or 100% of your joint earnings (whichever is lower).
Make the most of the Marriage Tax Allowance – more than a million people miss out on it, HMRC highlighted this summer.
If one of you earns less than the personal tax-free allowance – £11,850 for 2018-19 – you can transfer £1,190 of your allowance to the higher-earning spouse, as long as they’re a basic-rate taxpayer.
It’s a tax break worth up to £238 this year and you can backdate any claim for up to four years. That could save a couple a very welcome £900 tax.
You just make a claim online.
4. Where there’s a Will…
When you’re tying the knot, it’s vital to draw up a new Will because your old one isn’t usually valid when you remarry.
For blended families in particular, it’s important to be clear who gets what and when, making it even more important to get that Will written before you cut the cake…
It’s worth knowing that anything in a joint account or savings (but not your pension) usually passes automatically to the surviving spouse, rather than being distributed according to any Will (do be aware it can be different in Scotland).
5. Organise passing your pension savings to the people you care about
You spend years building your life savings, so it’s important to be aware that your pension isn’t covered by your Will.
Make it clear who you’d like to leave your life savings to by nominating them on your pension beneficiary form.
Keep everything up-to-date by reviewing your nominations – every year is ideal – and make sure you get in touch with your provider to update your nominations.
6. Planning for a better future together
As more of us live longer, it’s increasingly likely we’ll need help with our finances at some point in the future, either in the short or long term.
Whatever your age – and whether you’re married or single – think ahead to what could happen if you couldn’t look after yourself, your children or your finances how you’d want to.
That includes your pension savings if you’ve started taking them.
Keep things straightforward and give yourself some peace of mind by setting up a Power of Attorney (PoA) while you’re in good health.
A PoA means someone you’ve chosen can legally manage your affairs. There are various types covering different needs, and you can find out more at Gov.uk.
7. Look after each other, in sickness and in health
Marrying that bit later can mean looking forward to a more carefree future, with less responsibilities and more time to enjoy the things you love.
It’s worth considering one of you may need some kind of care in the future and it makes good sense to plan for costs like these.
It’s an area where a financial adviser can really help.
A pension is an investment and as with any investment, its value can go down as well as up and you could get back less than you’ve paid in. Tax and legislation may change and the information here is based on our understanding as at July 2018 and should not be taken as financial advice. Your own circumstances will have an impact on tax.