Mid-life marriage traps that can rob you of your retirement and deny your children their inheritance

Getting married in midlife can be “a complete injection of joy and fun,” just as comedian Miranda Hart told the world after revealing her own marriage at age 51 to Richard Fairs, a 60-year-old divorced father of two.

But middle-aged lovers need to clean their rose-colored glasses before tying the knot.

In the worst case, you could lose your pension; someone else’s children can inherit your money; your credit score could be damaged and your state benefits reduced.

Even more tragically, your “Multiple Right” may turn out to be the “Multiple Right” – and that can bring all the financial problems that come with divorce.

Here, Money Mail looks at seven common pitfalls to be aware of – and how to protect yourself before you take the plunge.

1. You may lose your private widow’s pension

If you are a widow and receive your deceased spouse’s pension, it could be taken away from you if you remarry.

This particularly affects members of a number of older public sector schemes. For example, the regulations for the teacher’s pension state: ‘The widow, widower and registered partner’s pension that must be paid to a participant who retired from a date before 1 January 2007 remains subject to termination in the event of remarriage, registered partnership or cohabitation. of the recipient’. .

Other public sector schemes have similar rules. “This is a terrible state of affairs and actually disadvantages older women who, statistically, are most likely to receive a spousal pension,” said Penny Cogher, pensions partner at law firm Irwin Mitchell.

She added: ‘There was so much public outcry that the law about this was changed for army pensions, but unfortunately not for other public sector schemes.’

She adds that individuals should check the status of their own arrangement to find out if there are any financial implications if they remarry.

Go to the website of your pension scheme to read the rules (each scheme is different) or call the pension scheme administrator. You can use the government website to look up contact details if you know the name of the employer or pension provider gov.uk/find-pension-contact-details

2. You can get a smaller state pension

Widows and widowers can sometimes inherit an extra benefit on top of their new state pension from their deceased spouse.

You may be eligible for this if you were married before April 6, 2016 and your partner reached state pension age before this date, or died before this date but would have reached state pension age on or after that date.

However, if you remarry or enter into a new registered partnership before reaching the state pension age, you will lose your right.

Remarriage after retirement age does not affect the AOW pension that you have already started to enjoy as a widow or widower.

Steve Webb, former Pensions Minister and partner at pension consultant LCP, says: ‘Anyone who receives a state pension as a widow or widower can remarry without this affecting their entitlement. But those who would receive an inherited state pension from a deceased spouse upon retirement will lose that right if they remarry before retirement age.”

For your specific circumstances, please contact the Government Pensions Service on: 0800 731 0469.

3. You may lose your benefits

If you get married or remarried, register a civil partnership or live with someone, any means-tested benefits you receive, such as Universal Credit, Pension Credit, Housing Benefit or Council Tax Support, may be affected.

Your partner’s income is taken into account in the overall assessment of the suitability of your household.

Report this to the office that pays your benefits as soon as possible after your wedding.

Do you receive alimony from your ex-partner for yourself? This may then stop, but the alimony for your children (also called ‘child support’) will remain unchanged.

4. Your children may be denied their inheritance

If you get married, your new spouse will automatically receive rights to all your personal property and assets on your death, plus the first £322,000 of the estate and half of the remaining estate.

Clare Moffat, pensions expert at Royal London, said: ‘In England, Wales and Northern Ireland, the general rule is that existing wills are revoked upon a new marriage.’

Make sure you make a new will that reflects your wishes.

Couples often write so-called mirror wills – identical wills in which all their assets are left to each other. However, if either of you marries with children you would like to inherit, you will need to make provisions in your will.

Otherwise, if you make a new will and leave everything to your new spouse, if you die first, they can then leave everything to their own children, while yours will be left with nothing.

To check this, visit gov.uk/inherits-someone-dies-without-will.

In Scotland the rules are different. Go to: gov.scot/collections/what-to-do-after-a-death-in-scotland

Private client partner Lisa Spearman of chartered accountant Mercer & Hole says: ‘It is vital that full and clear discussions take place between the whole family and that wills are then drawn up that reflect your wishes and ensure you understand what is going to happen. ‘

Harriet Errington, partner at law firm Payne Hicks Beach, adds an extra caution when helping your partner’s children. ‘If you provide financial support to your partner’s children after your marriage and die without making sufficient financial provision for your dependents, your estate may be vulnerable to a claim under the Inheritance (Provision for Family and Dependants) Act 1975,” she warns.

If you want your spouse to be cared for during his lifetime, should you die before his death, but you want your assets to ultimately return to your own children, you can specify this in your will.

To do this correctly, you will need the advice of an attorney.

Another option is a prenuptial agreement: an agreement made before marriage about how your finances will be divided if you separate.

These are not legally binding, but as long as you both take independent legal advice and explain why you want to divide assets and debts in this way, a divorce court will take them into consideration if the marriage fails.

5. Your credit rating could be affected

If you open a checking or savings account – or other financial product – with your new spouse, your credit details will be linked. That means if your partner has debt, misses payments, or makes other financial mistakes,

it can affect your ability to borrow.

Your credit details are not automatically linked when you get married, but only if you take out joint financial products.

But Spearman recommends that older couples have at least one joint account to make life easier for the surviving partner if the other dies.

“Upon death, the deceased’s bank accounts are frozen until probate is granted,” she says.

“However, joint accounts are usually accessible to the survivor. It may then be useful to have at least one joint account with cash to pay, for example, six months of the usual household bills in the period immediately after the death.

If you have recently had a death, you don’t have to worry about not having any cash.”

6. You may pay more taxes if you sell your home

Homeowners pay capital gains taxes on the profits they make from selling real estate – unless they sell the house they live in. However, married couples have only one exemption, while two single people have one exemption each.

It means that, for example, two people in a relationship who both own their own home can each sell their property without incurring capital gains tax.

But if the couple were to marry, they could sell only one of the properties without having to pay capital gains taxes; the other would be treated as the couple’s second home and therefore subject to capital gains.

If either of you are planning to sell soon, it may be worth doing so before the wedding. But this is a complex area of ​​tax and you should seek professional advice before making any changes.

7. Your online fiancé could be fake

The number of marriages at a later age has doubled in twenty years: in 2022, 82,912 people over the age of fifty were married in England and Wales (of which around a thousand were over the age of 80).

A year later, 4,160 cases of romance fraud were recorded, with £68 million stolen, according to UK Finance.

Romance scammers bombard mostly older victims with love, expressing their undying love, showering them with compliments and pretending to be interested in the details of their lives.

“There is often a gang of criminals working day and night so they can keep up a stream of messages day and night,” warns Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown.

She adds: ‘You should also be careful about revealing a lot about yourself, or turning on your webcam. If at any point they ask for money or personal information, this should set off alarm bells. Don’t distance yourself from either.’