Proposed new laws set to strengthen financial rights of unmarried cohabiting couples

Cohabiting couples who are not married or in a civil partnership are set to receive new rights to finances under new rules proposed by the government.

The proposals could see unmarried partners allowed a portion of the proceeds from a house sale, a percentage of a pension, automatic inheritance rights, and more when a relationship ends.

The measures are part of a new framework by the government that aims to bring family law “into the modern age” as more couples cohabit without getting married.

Cohabiting couples who are unmarried have far fewer financial protections than married couples under current laws. This can lead to complications if a relationship ends.

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The government says these difficulties disproportionately affect more vulnerable groups such as women, children, and victims of domestic abuse.

The framework for new financial rights is set to establish more concrete rules for how assets should be split when a separation takes place.

The consultation proposes that courts should have access to similar actions that are available in the case of a divorce, though options are set to be narrower to maintain the unique status of marriage in law.

David Lammy, deputy prime minister and justice secretary, said: “We’re launching this consultation to make sure our new family law builds a fair system that offers the most vulnerable protection in the event of a breakup, and at a time where the country is facing cost of living pressures.

“Whether you’ve been left bereaved by the sudden and unexpected death of a partner, or escaped horrific domestic abuse, our laws should work to protect you.”

The consultation launched on 5 June and will run for 10 weeks, closing on 14 August. The government will then use the findings to help inform future reforms, which will be made law “when parliamentary time allows”.

Separating couples could be entitled to a portion of a partner’s pension

The new framework will provide family courts with a number of new remedies they can use when an unmarried couple separates. These mirror the ones available in divorce cases.

Possible remedies include property adjustment orders which can transfer interest or ownership in a property from one party to another, potentially entitling a partner to partial ownership of a house.

Separating couples may be entitled to a percentage of their partner’s pension too under the new rules as courts will have the power to enforce pension sharing orders.

Courts could be granted the power to order one partner to pay a lump sum of money to the other partner.

The government also says in exceptional circumstances time-limited maintenance orders that require one party to provide regular payments to the other may be granted by a court.

Couples would need to cohabit for at least three years or have a child together for the rules to apply to them. Courts must also be satisfied the couple are in an “enduring family relationship”.

The consultation adds that while cohabitants may have access to the same measures as divorcing couples, this does not mean there would be equivalent financial outcomes to divorce.

Prenups and postnups set to become legally binding

Pre-nuptial agreements (prenups) and post-nuptial agreements (postnups) are becoming increasingly common in the UK.

Around 20% of couples sign prenups before marriage today, up from just 8% in the 1990s, according to research by the Marriage Foundation.

Prenups and postnups are written contracts made before a marriage or civil partnership that outline how assets will be split in the event of separation, divorce, or death.

In the UK, these agreements are not currently automatically enforceable by courts in England and Wales. Instead courts are simply told they should consider them unless doing so would be unfair, so long as the agreements were entered into freely and with full understanding.

This means that there is a degree of uncertainty around when the agreements made in prenups and postnups apply and when they do not.

However, as part of this new set of reforms, prenups and postnups are set to become enforceable contracts that “are not subject to substantive scrutiny by the court” as part of the new framework proposed by the government, eliminating much of this uncertainty.

This would allow couples to make legally binding agreements about financial arrangements in the event of divorce, though the consultation adds that safeguards would still need to be met.

Cohabiting couples set to get automatic right to inherit

The new framework is also set to extend new rights to couples when a partner dies without a will.

Under the current rules, when a couple have been living together for years but have remained unmarried there is no automatic right for the surviving partner to inherit a portion of the other’s assets if they die without leaving a will.

However, if the proposed laws come in, qualifying couples will receive an automatic right to inherit parts of their partner’s estate with similar rights as spouses or civil partners even if they are unmarried and have not left a will.