The Hidden Cost of Cohabitation

The Statistics on Living Arrangements.

Even though over half the population are married or partnered, rates are dropping, say ONS statistics. Among the under 30s, over two thirds of couples – along with one in five couples in their 40s and one in ten people in their 60s – are living together without getting hitched.

On the face of it, not marrying too soon seems like a sensible option as people need time to get to know each other well, become acclimatised to living together and see if it works for both parties. But without marriage, living together can also create vulnerabilities for couples.

What are the vulnerabilities of Cohabitation?

The first two things that (seemingly cynically) spring to mind with the cost of cohabitation are money and death. There are benefits to sharing finances through marriage, and myriad legal and financial bonuses for married couples. And then there’s the horrible thought of a partner dying unexpectedly and leaving the surviving one to face all kinds of financial and living problems alone.

If one partner dies without a will, the other could potentially receive nothing. And because everything passes to your partner’s children, if they have them, if the home you live in isn’t yours, it will be taken out form under you. If your partner has no children, anything in their name will pass to their parents. And if one of you has a pension that passes to your partner in the event of your death, being unmarried could negate that. Sure, in some cases you can  file a ‘nomination of beneficiaries’ form, to ask for anything to pass to your partner, but the form must be properly completed and filed correctly for it to apply.

If you and your partner split up and one of you has looked after dependants instead of being employed, you will have waivered the right to spousal maintenance. It’s scary stuff but on average, women’s pay falls 7% for each child they’re dating for, and without child maintenance, they will be thousands a year worse off. If one partner is a named owner of the house, the other partner may have no legal right to live in or take a share of the property. The same goes for pensions: if one partner has one and the the other has nothing, sharing may not happen.

how to overcome the hidden cost of cohabitation?

There are also tax and inheritance tax rules that greatly favour married couples and penalise unmarried ones. So how do you protect yourself from all of the above?

Drawing up wills is really the best way, if you’re unmarried, to ensure that your money is being directed properly and in the way you choose, between partners. I getting a cohabitation agreement is also a great idea as it clearly lays out what each partner owns and what each would be entitled too should the worst happen.