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Is Labour’s pensions IHT raid a boon for the wedding industry?

ended 25. October 2025

The government’s plans to bring pensions into the inheritance tax (IHT) net from April 2027 could have some unexpected consequences — including, potentially, a surge in weddings.

Under current rules, married couples and civil partners benefit from an inter-spousal IHT exemption, while unmarried partners do not. This doesn’t change in April 2027, but the inclusion of pension pots within IHT will push many people over the current £325,000 nil-rate band. This creates a specific issue for long-term cohabiting couples who could face a much higher tax bill on death than their married counterparts.

Speaking to MoneyWeek, financial planner Scott Gallacher of Rowley Turton explained that, personally, his partner would face an IHT liability of £214,000 from April 2027 purely because of his pension being brought under IHT.

He went on to say that, as a result, this provides a further incentive for him and his partner to marry, so that she would benefit from the inter-spousal exemption — saving £214,000 should he predecease her. In addition, it would also allow her to inherit his Residential Nil Rate Band, giving a further IHT saving for their two children.

With that in mind, we’re asking experts:

  • Are unmarried couples aware of the difference in IHT treatment to married couples or civil partnerships?
  • Could the government’s proposed pension IHT changes prompt more couples to get married or enter civil partnerships for tax reasons?
  • Might this become an unexpected boost for the wedding industry, as couples seek to protect their pension wealth?
  • How might financial advisers approach the delicate task of explaining that marriage could now have major tax advantages?
  • Is it fair that cohabiting couples — often together for decades — will face higher IHT bills than those who marry?
  • Could we see a rise in “pragmatic marriages” driven more by fiscal planning than romance?
  • What practical steps should unmarried couples with large pensions consider before 2027?

6 responses from the Newspage community

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Scott Gallacher
Director at Rowley Turton
The proposed inclusion of pensions within inheritance tax could come as a nasty surprise to many families who had assumed their pension savings would be outside the IHT net. While this change will particularly affect long-term cohabiting couples, as they don’t benefit from the inter-spousal exemption, it’s important to recognise that it could impact anyone with a reasonable pension and estate value.

To help people understand the scale of the issue, we’ve produced a simple online calculator showing how much extra IHT could be payable under the new rules. It’s not aimed specifically at cohabiting couples, but it does highlight how this change could push many households — who never thought of themselves as wealthy — over the IHT threshold

I'd encourage everyone to use our IHT calculator to check out the impact of the pension IHT changes on their own circumstances: https://rowleyturton.com/calculators/iht-calculator.html
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
Yes, there are definitely merits in getting married - if not for the romance but for the tax benefits!

This has always been the case, as there are other tax benefits married couples enjoy like the "marriage allowance", no inheritance tax on transfers of assets between them, and passing on unused inheritance tax allowances too.

For any government to bring rules in that would offer these same benefits to unmarried couples, it'd mean having other measures in place to determine what constitutes a "marriage-like" relationship, and therefore qualified for the same benefits.

It doesn't have to cost a lot to get married, particularly if it's only really being done for tax reasons. There are extra legal responsibilities and financial implications you have to a spouse in the event of separation/divorce so this should be considered against the tax benefits of marriage. And they say romance is dead.
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Anita Wright
Chartered Financial Planner at Ribble Wealth Management
It would not be the first time I have given clients the decidedly unromantic advice to get married purely for tax reasons—and some have done exactly that. It is a simple, effective solution. I am not convinced it would materially boost the wedding industry: for many, marriage is a straightforward legal contract, not a grand event—you need two witnesses and a booked slot at the registrar’s office, nothing more. There is likely to be increased demand for new wills after marriage, as marriage typically revokes existing wills.

Plenty of people still do not understand how IHT works or whether it applies to them. If you are married and hold substantial pension wealth, it is sensible to seek financial advice if you have not already. There are still legitimate IHT-mitigation options available, and the right guidance is crucial to avoiding unnecessary tax.
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Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
Marriage has many fiscal benefits, and although an advisers may list these to their clients it’s seldom the reason for buying the ring. People aren’t moved, in general, by the tax advantages of love, they are moved by love itself.
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Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
The inter-spousal exemption remains one of the most powerful reliefs available, and the government’s proposed change could turn marriage or civil partnership into an urgent financial decision rather than a romantic one. I’ve already heard clients raising the idea of marrying purely for tax protection and while some may prefer civil partnerships as a practical route, it underlines how policy can drive deeply personal choices. There’s even been talk of one rather extreme case where a man considered divorcing his wife to marry his former mother-in-law to save tax, which highlights how absurd and emotionally charged this debate could become. For many, the focus shouldn’t be on knee-jerk decisions, but on understanding their exposure and putting proper estate planning in place whether that’s through marriage, trusts, life insurance or clear beneficiary planning. The key is to plan calmly and proactively, not react out of fear.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
The tax code should absolutely favour marriage over casual cohabitation. Married couples demonstrate long term commitment, shared financial responsibility, and provide stable environments for wealth building and child rearing. Why should the Treasury treat temporary arrangements equally with lifelong partnerships that create genuine economic value?

Tax policy should create incentives in family formation. Wedding venues and registry offices will benefit from this fiscal clarity, creating jobs while strengthening social bonds. I don't see this as an unintended consequence. This is the market correctly pricing commitment at its true value. Labour may have created this policy by accident, but they have delivered the Conservative dream of making marriage financially attractive again.