Pensions and unmarried couples: the gap that surprises people most

Pensions are often the second most valuable asset a couple owns after their home, and for older couples they can be the most valuable. For unmarried couples in England, Wales, Scotland and Northern Ireland, the rules around pensions are markedly less protective than for married couples. The consequences only become visible on separation, retirement, or death.

What pension sharing is, and who can use it

Pension sharing orders were introduced by the Welfare Reform and Pensions Act 1999. They allow a court to divide a pension between two parties as part of a financial settlement. The order takes a percentage of one party's pension and credits it to the other.

Pension sharing is available only on divorce or dissolution of a civil partnership. It is not available to unmarried cohabitants. The same is true of pension attachment orders and pension offsetting in the family court sense.

For cohabitants, the pension stays with whichever partner accrued it, in full, regardless of how the relationship contributed to the conditions under which it was built.

Survivor benefits: it depends on the scheme

Most workplace pensions allow members to nominate a beneficiary for death-in-service or dependant's pension benefits. Defined benefit (final salary) schemes vary widely in how they treat unmarried partners; some pay automatically to a registered partner, some only to a spouse or civil partner, some leave it to trustees' discretion based on a nomination form.

The practical step is simple and often overlooked: fill in the nomination form. Without it, scheme trustees default to the rules, and those rules may not include an unmarried partner.

State pension

The State Pension is built on your own National Insurance record. You cannot inherit, share, or claim entitlement based on a cohabiting partner's record. Spouses and civil partners have limited inheritance rights to certain elements of older state pensions; cohabitants do not.

Bereavement support

The Bereavement Support Payment (the main benefit paid to people whose spouse or civil partner dies) was, until recently, available only to married couples and civil partners. In In re McLaughlin [2018] UKSC 48 the Supreme Court held that excluding cohabiting parents was incompatible with human rights law. The relevant legislation was changed in 2023 to extend it to surviving cohabiting parents of dependent children. It is still not available to cohabiting partners without children.

What couples can do

For couples without an immediate plan to marry or enter a civil partnership, the practical steps are:

• Each partner reviews and updates the nomination forms for every workplace and personal pension
• Each partner makes a will that reflects current intentions
• A written private financial agreement records what each partner has agreed about pension contributions made during the relationship and how that should be reflected if you separate
• Both partners maintain awareness of each other's pension balances as part of annual disclosure

None of this gives a cohabiting partner the same legal rights a spouse has. It does, however, ensure that the discretion the system leaves to scheme trustees, employers, and the rules of intestacy is exercised on the basis of what you both actually intended.