Prime Minister Theresa May has announced a consultation on allowing opposite-sex couples to enter into civil partnerships.

The consultation will look at how to manage the legal, tax and pension implications – rather than addressing whether or not opposite-sex couples should be allowed to enter into partnerships. It comes after the Supreme Court ruled in June that laws banning opposite-sex couples from civil partnerships were incompatible with the European Convention on Human Rights.

Hargreaves Lansdown personal finance analyst Sarah Coles said: “This is a cause for celebration for couples who don’t want to be part of the institution of marriage, but want to protect themselves and their families.

“Currently unmarried couples (who aren’t in civil partnerships) are treated as financially inferior. Spouses benefit from a variety of special rules – including the ability to transfer savings or capital gains to the spouse who pays the least tax. There’s also the marriage allowance, which is worth up to £900 in the first year. Unmarried couples can’t take advantage of any of this. This inequality endures even after your death: married couples and those in civil partnerships can leave everything to one another free of inheritance tax – and can pass their IHT allowances over too. It means they can leave at least £650,000 before paying IHT (and more if they leave their house to children or grandchildren). Their unmarried counterparts, meanwhile, will only have their own allowance – and everything they pass to one another in excess of this allowance is potentially subject to inheritance tax.”

Coles added that unmarried couples are exposed to an “enormous number of risks”.

“If they split up, they don’t have any guaranteed rights to each other’s property, and may have to fight through the courts. If their partner dies, on the other hand, and they haven’t made a will, they have no automatic inheritance rights, so they might have to leave their shared home. Even with a will, they won’t qualify for state benefits – such as Bereavement Support Payments or rights to their partner’s state pension contributions. Occupational pensions, meanwhile, may not offer survivor benefits.

“If they’re together for 50 years, an unmarried couple could end up £190,000 worse off than their married counterparts. Opposite sex couples have been battling for the right to civil partnerships. The court victory in June was a major step forward, and this is the icing on the cake.”

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