Couples have some distinct advantages when it comes to financial planning. By handling your finances together, you could make savings and build more wealth for the future.
When you’re married, your finances will typically be combined, yet the opportunities for joint planning start long before this.
Read on to learn some of the best financial tips for a couple at every stage of their relationship.
1. The early stages of a relationship
At the beginning of a new relationship, you likely won’t be planning your financial future together. However, there are still opportunities to save as a couple.
Take advantage of couples’ deals
There are many couples’ deals that could help you make savings when eating out or taking day trips together.
For instance, lots of restaurants offer set-menu deals for two at a reduced price. A quick online search could help you find offers in the local area to take advantage of.
Train travel is more affordable with a “Two Together Railcard” too. The card costs £30, which is a small price to pay compared with the savings you could make if you take regular trips together.
Taking advantage of these deals is one of the simplest ways to enjoy the financial benefits of being in a couple at the start of a relationship.
Discuss your financial mindset and goals
When two people share common goals and work together to manage their wealth, it could be far easier to achieve their dream lifestyle now and in the future.
However, we all have our own financial mindset, and this can cause tensions in relationships. If one person likes to spend on luxuries while the other prefers to save diligently, it could be difficult to plan together.
That’s why it may be beneficial to have conversations about financial goals and the way you both manage your wealth during the early stages of a relationship. That way, you can ensure you’re both on the same page and as the relationship progresses, you can start creating a financial plan together.
2. Moving in together
When you move in with a partner, you may begin combining your finances, and you can benefit from sharing significant costs, such as your mortgage and utility bills.
Create a shared budget
While you might keep your finances separate to some extent, you will likely have lots of shared expenses if you’re living together. As such, it could be useful to create a joint budget and pay expenses from a shared back account.
Making decisions about your budget together could help you find ways to save and ensure you’re both able to work towards your financial goals.
To this end, you might also decide to factor contributions to shared savings into your budget.
Take advantage of your ISA allowances
When you and your partner are trying to build savings together, you might benefit from contributing to ISAs. This is because you don’t pay Income Tax, Capital Gains Tax (CGT), or Inheritance Tax (IHT) on interest or returns from wealth in an ISA.
In 2024/25 (continuing in 2025/26), you can contribute up to £20,000 across all your ISAs. More importantly, this is an individual allowance, and your partner has their own.
By taking advantage of both allowances, you could save or invest up to £40,000 tax-efficiently between you.
That said, there have been suggestions that the government could reduce the Cash ISA limit in the future, making it more difficult to make tax-efficient contributions to your savings.
3. Marriage or civil partnership
When you decide that you want to spend the rest of your life together, you may cement your relationship by getting married or entering a civil partnership. As an added bonus, there are some tax benefits to take advantage of.
Share your Capital Gains Tax Annual Exempt Amount
You could pay CGT on your profits when selling certain qualifying assets including:
- Shares outside an ISA
- A property that isn’t your main home
- Most personal possessions worth more than £6,000 (excluding your car).
Fortunately, you have an Annual Exempt Amount of £3,000 in 2024/25 (continuing in 2025/26). This means you can earn up to £3,000 each year before you pay CGT.
Any profits that exceed this threshold will be taxed at:
- 18% if you’re a basic-rate taxpayer
- 24% if you’re a higher- or additional-rate taxpayer.
However, you can pass assets to a spouse or civil partner without CGT. If your partner later sells the assets, some CGT may be due.
Despite this, they have their own Annual Exempt Amount to use and this creates opportunities for joint planning.
For instance, if you purchased some shares for £10,000 and later sold them for £15,000, you’d make profits of £5,000. After applying the Annual Exempt Amount, you’d pay tax on the remaining £2,000, assuming you made no other gains in that year.
Conversely, if you passed half the shares to your spouse and both sold them, you’d make profits of £2,500 each. Provided you didn’t make any other gains in that year, you would both be within your Annual Exempt Amount and wouldn’t pay CGT.
We can help you take advantage of both Annual Exempt Amounts and find the most efficient way to dispose of assets as a couple.
Take advantage of Inheritance Tax planning benefits
Couples who are married or in a civil partnership have an advantage when passing wealth to loved ones and finding ways to mitigate IHT.
In 2024/25 (continuing in 2025/26), you can pass on up to £325,000 without IHT when you die. This is your “nil-rate band”. You may also benefit from a “residence nil-rate band” of up to £175,000 when passing your main home to a direct descendant such as a child or grandchild.
However, you can pass your entire estate to a spouse or civil partner without IHT and they inherit your unused nil-rate bands. As such, you could pass on up to £1 million between you – twice the amount that you could if you weren’t married or in a civil partnership.
You may want to consider this when creating your estate plan. While you might want to leave wealth to other family members, passing everything to your partner could be more tax-efficient in the long term.
Get in touch
If you want to explore opportunities for planning as a couple, we can help.
Please get in touch or email us at advice@mlifa.co.uk for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning or tax planning.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.