Civil partnership ruling boosts pension rights

A landmark ruling last week could help many more people qualify for pension benefits. The Supreme Court found that it was unlawful for an opposite-sex couple to be barred from entering into a civil partnership, thus establishing legal parity with same-sex couples.

Many occupational pension schemes only offer survivors' benefits, such as widows' pensions, to married couples or gay couples with civil partnerships. If men and women enter into civil partnerships, they would almost certainly have to be offered the same benefits. The fallout from the Supreme Court ruling continues, with the government now reviewing the law on marriage and civil partnerships.

The latter may eventually be abolished now that same-sex couples are allowed to marry. Nonetheless, in the meantime, occupational pension schemes will be expected to review their rules as the law is updated.

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The ruling is also a reminder to all pension savers to check who they have said they wish their pension benefits to go to in the event of their death. Savers are usually asked this question when they first join a pension scheme, but many subsequently forget to update their instructions as their family circumstances change. This could mean their savings end up going to the wrong person to a former spouse, for example.

Tax tip of the week

The taxman's new online application process for claiming marriage allowance can be completed in less than ten minutes, says HMRC. Previously there had been criticism that the allowance was not easy to claim, with more than a million eligible couples yet to do so, says Kevin Peachey on BBC News. To be eligible for the tax break, partners must either be married or in a civil partnership. One partner must earn at least £11,850 per year, and pay tax at the basic rate of 20%. If that partner is earning more than £46,350 (£43,330 in Scotland), they are not eligible. The other partner must be earning less than £11,850, meaning they pay no tax. If these conditions are satisfied, the partner who does not pay tax can transfer 10% of his or her tax allowance to the other person, saving £238 in this tax year. As the claims can be backdated by up to four years, couples can also claim up to £662 as a lump sum.