For richer or for poorer, in sickness and in health

Justin Urquhart-Stewart continues his series on financial planning at various stages of life with a trip down the aisle
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The Independent Online
The strains of the church organ are still echoing while you look at the recently arrived photographs of the wonderful day. Only then do you remember just how much you spent on the glorious occasion. Oh boundless joy! Oh financial rupture! But don't worry.

The good news is that from now on you will be pooling your resources as well as your costs.

For many this will have occurred when moving in together. But the key element that is often overlooked is marriage is a change of legal status. The new partnership is a legal entity and as such gives each of you generally equal rights over your assets and liabilities.

The two of you have reached one of the most important moments of your lives. What you lay down as foundations together now will affect your future - as the vicar said "for richer or poorer".

Few of us have the gift of foresight. But we can consider what we want to achieve and planning is essential. There is absolutely no need to rush out and cover yourselves in fashionable financial products. These will only soak up cash when you need it most and probably won't give you the future flexibility you require.

So sit down and contemplate your alternatives together. You need to consider a number of areas: First, how are you going to build your careers? The guaranteed job for life no longer exists. You may be working full-time, part-time or on limited contracts but what you want to do with your careers impacts on the type of financial arrangements that you need to make.

Will you have children at some stage? Maybe not yet, maybe never. My doctor once advised me to consider this carefully. "A child or a Ferrari," he said, "both require as much love and attention and cost about the same to run." Financially, there is never a good time to start a family. But you can make preparations.

What are your housing needs? These days this tends to be governed by our work - and gone are the days of a guaranteed profit on the sale of property. While you will want a home for yourselves there are alternatives to buying. Buying a property encumbers you with the costs of maintenance of both the mortgage and the building itself. Renting maybe more flexible until your plans become more certain.

When do you want to retire? Yes it may be years away. But these days early retirement is not unusual. If you want a comfortable retirement then start acting now.

So what action should you take? First, review your pension arrangements. You both may already have pensions - either private or occupational. Look at their value, performance and flexibility. It is important that you benefit from eachother's pension contributions. You will need to tell the pension managers anyway of your change of status so ask them, at the same time, for their proposals. But shop around before acting.

Don't go pension-mad, though. While they are an excellent means of tax- free savings, they are inflexible. Once in, your money is locked up until your retirement .

Still, pensions can be helpful before retirement. They can provide insurance provision for your partner and the tax-free lump when you retire can also be used to pay off the mortgage.

Think about savings and investment. We rarely get lump sums to invest so the only way for any of us to build savings is by putting aside a modest amount every month. Hopefully you will have already started.

Always keep a reserve for those financial gusts that hit us every so often. But also think about starting a regular monthly investment into a unit or investment trust plan. These are low-cost and can give a good spread of investments to minimise risk. They can generate income, which is best reinvested, so that you can watch your nest egg accumulate.

You can shelter this nest egg in a personal equity plan to avoid paying tax on either income or capital growth. This can be a good medium-term investment fund to which you can add for future uses - like education costs (particularly bearing in mind the cost of university education).

Make sure the Inland Revenue knows about your change in tax status. I suspect a significant proportion of the pounds 500m they are trying to give back comes from us not telling them of our changes of position. Change your tax coding and claim your married income allowances.

Do remember to use your tax limits and exemptions. Put any investment in the name of the partner who pays the least tax. Your Pep and Tessa allowances are doubled between you, but you will probably have more short- term claims on your cash for the moment.

Make sure you are properly insured. It is a sensible way of helping your partner and protecting the value of your assets. Life and critical illness insurance is designed to help you or your partner to cover large debts, like the mortgage, if either of you dies or becomes critically ill.

Quite often mortgage providers make it a condition that you have this type of protection - but watch out for the terms you are offered and the charges.

Household and other asset insurance doesn't do much for you - until disaster occurs. Maybe when you were single this was not such an issue, but now that you have a responsibility for your partner must act accordingly.

Make a will. Possibly the last thing you want to think about after your marriage is your death. However just speak to any widow and she will tell you the difficulty of having to deal with the estate of a husband who didn't leave a will. It takes little effort or cost but makes you consider what should happen.

We never seem to have enough money when we need it most but by investing time in laying some solid foundations now, you will avoid a lot of financial grief later. There will be many more complications over the next few years, which you won't be able to predict. The main rule of financial planning at this stage is to keep it simple, keep it low-risk and keep it flexible.

Don't over-commit yourselves now, you will only have to unpick it later. And whatever you do, remember to leave adequate money aside for having some fun. Remember you married your partner - not your bank statement!

The author is Business Development Director at Barclays Stockbrokers.

Key points

Review pension arrangements. Look at their value, performance and flexibility. It is important that you benefit from each other's pension contributions. But don't overdo it at this stage. It reduces flexibility.

Think about a regular monthly investment into a unit or investment trust plan. You can shelter it in a Pep to avoid paying tax.

Change your tax coding and claim married income allowances. Put investments in the name of the lower taxpayer.

Make sure you are properly insured. But watch out for the terms and charges on life and critical illness insurance that is sold as part of a mortgage.

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