Marrying for pension?

[Newnamefornow1]

I've NC for this, but tonight I had a conversation with one of my oldest best friends about a FB chat about your pension dying with you if you weren't married. One poster mentioned about a pact with a male friend that if either got a terminal diagnosis, they would marry so their pension would go to their spouse. I was telling my friend about it and joked that i might speak to my exBF and suggest same as we both have good pensions (we're still very good platonic friends). My female friend then said she would marry me as she doesn't have a pension. We're both single, 53 years old, heterosexual females, no partners at minute.... made me wonder if this would actually work or I am being totally unreasonable? 🤔

FWIW I still live in hope of getting swept off my feet, but if i couldn't find someone to marry me when i was younger, shinier hair and a size 10-12, I can't see me finding him with me battling the menopause weight gain and all its wonderful surprises (not to forget 2 hormonal moody teenagers).

AIBU to think this is actually a good idea?

What kind of pension do you have? The kind of pension that can only be left to a spouse us quite rare these days. It would have to be a defined benefit employer pension or one in payment where you have specifically bought an annuity that covers your spouse.
These days people are more likely to have a defined contribution scheme where you build up a pot of money which you use to fund an income in retirement. You can leave it to whoever you want.

Your pension should go to your children.

If you own your own home, if you married your new spouse would get it not your children. I'm sure you would not be happy with that.

Quite a few assumptions here.
The OP hasn't said she has children.
If the OP made a will then any property would go to whoever was named in that.

OP if you own a property and would want to leave it to someone who isn't a relative and you knew you were dying then it might be a sensible thing to marry them to avoid inheritance tax. Especially if you have a big pension as well.

Is this the same with state pension or just private.
I often wonder as me and dp of 13 years are not married and live apart.
He has a nhs pension, could that go to his children?

I thought the state pension now no longer goes to spouse?

I think inheriting a state pension is complicated actually looking at it. I think they are largely scrapping it if you are not state pension age before 2016.

Married women used to bea able to pay a reduced stamp have a reduced pension and be a beneficiary of their husbands pension on death. This is no longer the case.

I don't know about the newer NHS pensions , I stopped being a financial adviser 10 years ago and there have been changes since then. But the older ones were final salary defined benefit schemes that could potentially be left to a spouse but not children.

It's likely that you pension fund will be your second largest asset, if not your largest asset, so it is definitely something to consider.

At pension age, your accumulated pension fund will be used to purchase an annuity for the rest of your life. The pension payable will vary depending on a number of things including for example -

^your age at retirement - life expectancy will be different so the company providing the annuity may expect to pay your pension for say 30 years (from age 60), 20 years (from age 70),

^your health - if you can prove ill health/terminal diagnosis to the annuity provider at the time of retirement, then you may be able to attract a higher annuity rate

^your sex - females have a longer life expectancy than males so attract a lower annuity rate, two married men could expect a higher pension than two married females even if they have the same accumulated pension fund,

^joint life or single life annuity - a joint life, longest life annuity will attract a lower rate of pension than that of a single person where the annuity will cease on death,

^guaranteed period - a person may choose to have their pension guaranteed for a fixed period, say 10 years whereas the norm is 5 years, something to consider if annuitant has children who are still dependent,

^the annuity rate available at that time,

^whether you choose the option to index link your pension, perhaps a fixed 2% rate of increase or the annual inflation rate

Since you have children, this would not be something to be done lightly, what about your other assets? What about a miraculous recovery? What if one of you falls in love with another person, demands a divorce and half the matrimonial home? What if someone claims the marriage was never consummated? The entitlement to the spouse's pension might rest on getting married before the pension commences and the person actively opting for a reduced joint life annuity. If you were already 5 years into retirement before receiving a terminal diagnosis and marrying at that point then it might well be that the spouse would not have any entitlement to a residual pension.

I am not qualified to advise, you should seek advice from a Qualified Financial Advisor before embarking on anything that might adversely impact on your children.

Annuities are far less common these days (I still work in the industry) a lot of people choose income draw down now. The rules for inheritance are very different from an annuity and in most cases any remaining funds can be passed on.

PP is right, anyone with a decent pension pot and concerns like this would benefit from proper financial advice.

The OP hasn't said she has children.

Maybe re read the Op, which states not to forget 2 hormonal moody teenagers.

I think it’s a fair assumption to assume that the Op has teenagers!

Op - it really depends on what type of pension you have, as to whether it will die with you.

A defined benefit (final salary) pension will usually pay out a % of your pension to a spouse, maybe also a child under 25 (I know my friend retired from the NHS early as her only child was about to turn 25, so she wanted to get the lump sum and start drawing the pension, otherwise it would be lost).

A defined contribution pension is effectively a pot of money that you can drawdown from, or use to buy an annuity.

If left as a pot of money, rather than used to buy an annuity, it is inherited by whoever you wish (your children in this case, whatever their age)

The state pension dies with you, no one inherits any of it now (as someone else said, that wasn’t always the case)

You and ex partner both have good pensions - friend had none, what does she bring to the arrangement?

Interesting thought. If you own a house, you don’t want your new partner to take that instead if your children.

Making a will will fix that, the spouse only inherites automatically if there is no will.

You're right, my apologies, I missed the reference to teenagers, I read the OP 3 times before posting! That'll teach me to post at crazy times, my reading compression goes right down.

Op you need to check the conditions of your pension. See if whatever benefit available can be passed to your children.
For example, if you have an "old style" local government pension it's final salary scheme and a spouse would benefit if you died. It can't be willed to anyone else, not even a long term partner. If you are on "new style" LG pension you can opt for it to go to a partner, I'm not sure about children.

Can I check the old style pension LGPS will only go to a partner you're married?

I think and happy to be corrected that you would need to update your Will if you marry as any existing ones would no longer be valid.

Yes, I have an old scheme pension. If you have one it's really easy to check this, it's all on the Net, or you can ring or email them. Married or they get nothing. The only thing you can do is nominate them to get the lump sum.

Getting married to a friend wouldn't just be about pensions would it? The friend would become next of kin. They would be consulted by the hospital. They would get the final say on funeral arrangements. If the will wasn't changed quickly they would inherit everything Op has.

If you had no children and no-one you planned to leave anything to then a friend with no pension might as well benefit if you’d like them to.

With children not a chance would I risk a lost will that could leave your children going without.

Thank you all very much for your replies, i knew it would provoke more questions that i hadn't thought of.

Yes I have 16 year old twins, my sister is my NOK/ executor of will and i do own my house with small mortgage which will be paid off in 5 years. The house is willed to my children and I hadn't thought that i would need to get my will updated, so thanks for that. I have known my friend for almost 40 years and trust her implicitly that she wouldn't take from my children. Although she wouldn't be able to return the favour, I would love to give her something to help her as she gets older too.

I am already looking at my pension planning as I have several small pensions but my main ones are NHS, including 14 years in the old final salary pot. If anyone has NHS pensions they will know how difficult it is to pull together all the information/differences and calculate the money which is why I'm looking for an advisor to sort it out. I have already set up my children as beneficiaries in the pensions which allow it, but I know that this is age limited. As someone said it is age 25 years, so maybe I only think of marrying when I'm over 61?

So pleased I asked this question, I would love to tag you all but I'm doing this from my phone (with annoying adverts covering most of the screen) so humble apologies. Thank you all, you wonderful people! ❤️

Any existing will is negated on marriage - just include doing a new one once married.

I have 4 defined benefit pensions and a percentage can only be given over to spouse on death not the whole pension. For example in a 5k a year pension I think he would get 1k a year.

@Newnamefornow1 You need to take very very good legal advice before doing this.

What happens if your friend gets ill and needs care?

what if they need to claim benefits?

What happens if they meet someone and want to marry them?

What if they get into debt?

What if your will gets lost (it happens - a major law firm lost my grandfathers) and your estate has to be dealt with as intestate? Would she be able to afford to do things as you wished? What if she was incapable of doing so?

Marriage brings rights.

Never even thought of this but yup if you’re both in the same boat etc why not. Only thing is what if one of you met, fell in love and wanted to divorce to marry them I dunno 🤷‍♀️. Or what if the friendship went sour. But yup good thinking x