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Unmarried parents warned to take financial precautions

Written by: Emma Lunn
Almost half of babies were born to unmarried parents last year, according to the Office for National Statistics (ONS).

There were 640,370 live births in England and Wales in 2019 – down 2.5% in a year and 12.2% since the peak in 2012.

Almost half (48.5%) of babies were born to unmarried parents. This is up from 46.2% in 2009, 38.9% in 1999 and 27% in 1989.

The average age for women to have their first child was 30.7 years in 2019 – but the average age for a woman to marry was 35.5 years.

Co-habiting parents are advised to financial precautions to protect both them and their children.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “In the past 30 years we’ve gone from just over a quarter of children being born outside of marriage to around half. However, in many cases the law hasn’t kept up with the new reality, so unmarried parents and their children face potential pitfalls – from inheritance risks to losing financial support.

“To some degree, we are just doing things in a different order nowadays. The average age at which a woman has her first child is now about five years younger than the average age of marriage. So couples may live together, have children, and then tie the knot.

“However, other couples are just not interested in marriage. More people are choosing not to marry or enter a civil partnership, and are quite happy with a relationship without the paperwork. Whether being unmarried parents is a temporary or permanent state, it’s essential to understand the risks, and take steps to protect yourself.”

If one parent dies

If you die without a will, your children have the right to inherit, but your unmarried partner will not automatically inherit unless you own property or assets jointly. If you do inherit, you won’t be exempt from inheritance tax.

If you aren’t married, you won’t qualify for a bereavement support payment if your partner dies. This is worth £3,500 and monthly payments of £350 for up to 18 months for a married parent who has been bereaved.

If you split up

Parental responsibility gives you the right to make decisions about your child. If you split up, it will give you additional rights – for example, the other parent will have to tell you before taking the child out of the country.

If you aren’t married, the birth mother will always have parental responsibility. But the birth father will have had to jointly register the birth with the mother and be named on the birth certificate to have parental responsibility.

If this hasn’t happened, he will need a parental responsibility agreement with the mother, or an order of the court.

Both parents are responsible for financially supporting their child, regardless of whether the child lives with both of them and who has parental responsibility.

If you can’t come to an agreement after a split, the Child Maintenance Service can get involved. But ex-partners have no requirement to support one another, and even if you agree something informally, it’s incredibly difficult to enforce.

If the property is held in the name of one partner, it belongs to them. If the children live with the other parent, a court could give them the right to live in the property until the youngest child is 18, but at that point it reverts to the owner.

How to protect yourself

Fathers can protect themselves by being there when the birth is registered, and being on the birth certificate – this will give parental responsibility.

The only way to ensure an unmarried partner inherits is to draw up a will so that your assets are left exactly as you want them.

Both partners should think carefully about how all assets are owned. If one partner moves in with the other, and contributes financially, you can switch to owning the property as tenants in common. This allows the financial contribution to be reflected accurately in the proportions of ownership.

A co-habitation agreement can set out all kinds of things, from how you manage money between you to who owns what in the relationship. It can also iron out what will happen in the event that you split up.

Life insurance can ensure that your children are provided for in the event of your death. After a split, the resident parent should have cover and if one of you is paying child support, they should have insurance that will replace it in the event of their death.

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