Here’s a stark reality check for unmarried couples living together: your finances could be at serious risk if you’re not legally tied. Personal finance guru Martin Lewis recently sounded the alarm on this often-overlooked issue during his ITV show, where a viewer asked him the million-dollar question: What’s the most critical financial step to take in 2026? While Lewis emphasized the importance of Power of Attorney, he also shed light on a controversial topic that could save—or cost—you a fortune: inheritance tax and the legal perks of marriage.
But here’s where it gets controversial: Lewis pointed out that unmarried couples face a significant disadvantage when it comes to inheritance. If you’re married and leave your property to your descendants, you can pass up to £1 million tax-free. But if you’re unmarried? That threshold drops to £500,000. And this is the part most people miss: even if you’re cohabiting, your relationship isn’t legally recognized in the same way, leaving you vulnerable to hefty tax bills in the worst-case scenario.
Lewis broke it down further: marriage offers two major inheritance tax benefits. First, assets left to your spouse are tax-free. Second, you can pass your unused inheritance tax allowance to your spouse, effectively doubling their allowance to £1 million when they pass away. Think about it: that’s a potential £200,000 saved in taxes—a life-changing sum for many families. But if you’re unmarried, that benefit vanishes, and your partner could face a steep tax bill when inheriting your assets.
To illustrate, Lewis shared a scenario: imagine a couple with £1 million in assets. If unmarried, the first partner’s death uses up their £500,000 allowance, leaving the surviving partner with just £500,000 in tax-free inheritance. If they leave this to their children, a 40% tax rate could result in a £200,000 bill. But for a married couple? The entire £1 million passes tax-free, thanks to the combined allowances.
Here’s the bold question: Is marriage or a civil partnership worth considering purely for financial reasons? Lewis suggests it might be, especially given the substantial tax advantages. But this isn’t just about money—it’s about protecting your loved ones from unnecessary financial strain. And while Power of Attorney is equally crucial (Lewis has had one for 15 years, despite being young and healthy), it’s the inheritance tax perks of marriage that often fly under the radar.
So, what’s your take? Is tying the knot a smart financial move, or should the law do more to protect unmarried couples? Let’s spark a conversation—share your thoughts in the comments below!
