Cohabitation- Overview and Facts

Cohabitation is simply, two unmarried people making arrangements to live together under the same roof. About a third of couples who cohabit in the United Kingdom, don’t have an understanding of how to go about their finances as well as legal rights in case one partner happens to pass on. One in a group of ten believes in inheriting their fellow partner’s property which might be tricky unless there is the presence of a written will by the deceased.

Most Brits, nearly 51% which is close to two million, stay together as couples before getting married to each other and it’s on a sad note that 74% of cohabiting partners do not have life policies nor do they have a written will.

Moving ahead, statistics also show that 33% of these couples have not appointed any nominee on their pension plan. Cohabitees have continued to wrongly believe they have eligibility for financial benefits including Bereavement allowances, Capital gain tax breaks as well as Inheritance tax breaks.

Greater financial risk exposed

The fact remains that couples who are cohabiting are not prepared in case the worst happens where 19% think that they have got an entitlement to some benefits and allowances if a partner dies. At least 68 percent are more likely to feel insecure since they have low financial cover in place in comparison to 76% of the married partners.

Coming to taxation rights and obligations, around 19% assume to have eligibility to similar Capital Gains tax breaks just like married partners, and another 21% believe in inheriting their lover’s monthly income pension at the event of their death.

Conclusion

Some cohabiting couples strongly believe they are entitled to the same financial allowances which are a wrong perception. Cohabiting couples should spend time to learn and understand their financial status to plan right for life ahead.



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