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The Cost of a Wedding …..

The money generated by the wedding industry in the UK is estimated to be around £7bn a year. This year could be a bumper one with the recent royal wedding boosting the market. The wedding of William and Kate cost a great deal more than most, at a figure estimated to be in millions, although comparatively less than the £70m cost of the wedding of Charles and Diana.

The average cost for a wedding in the UK, according to estimates from businesses in the wedding industry, currently seems to range from £11k to £25k. Clearly, anyone trying in any way to emulate the royal couple may find themselves at or above the top of the range! A recommendation across the industry is that having a budget for a wedding is essential if you want to effectively manage your expenditure. A common observation is also that a superb wedding can cost as little as a few hundred pounds or as much as £20,000! Starting with a checklist of needs and wants, a calendar and a commitment to stay within an agreed budget provides a good framework for an exciting and participative pre-wedding planning phase.

‘Cutting your cloth accordingly’ may become a common part of the planning and it may be helpful to have items prioritised as essential or optional/luxury. Allocating the budget to items of expenditure can be done as percentages or as fixed amounts, with an understanding that over-spending in one area is likely to squeeze others. Guard against the excesses encouraged by the emotive appeal of the glossy wedding magazines, wedding fairs and persuasive marketing that every ‘little extra’ is ‘essential’ to make the day ‘extra-special’.

Having and keeping to a theme may help to identify a budget that is easier to control. Relatives may want to buy or contribute to particular parts of the wedding. Bearing in mind that the estimated average cost of a honeymoon is now £4k, a close relative offering to pay for that would make a significant contribution.

Unless you have unlimited funds, what you perceive as an affordable budget needs to be set in the context of life and economics before and after the wedding. This time of financial uncertainty might seem unfair in the fairytale wedding world. However, it is important to remember that the success of celebrating a wedding should be less dependent on the lavishness of the occasion and on the amount of drink and food consumed, and more on the support and feelings that families and friends have for the bride and groom.

If you want to find out more about financial planning and the things you should consider after marriage and how to plan for your future life together, please contact us.

Don’t leave it to late, find out how marriage can change your financial planning ….. As we say – ‘Happily ever after – just takes a litlle planning’

Email – advice@conceptfp.com

Tel: 01737 225665

Visit us at www.conceptfp.com

The NO Wedding Planner

Recent figures show a significant decrease in the marriage rate. From a peak in 1940 when, spurred on by an impending war, 426,1000 young couples married, in total just 228,204 marriages took place during 2008 in England and Wales.

The falling marriage rate is partly attributable to a rise in the number of people choosing to remain single but is mostly down to the fact that more and more couples are choosing not to marry and this has ramifications for their financial planning.

Let us consider the example of Paul and Sarah. They own a property valued at £600,000. The property is owned 60% by Paul and 40% by Sarah, reflecting their differing initial deposits. They have an outstanding mortgage of £100,000. The mortgage is covered by a life assurance policy which will pay out on the first death. They also have a joint savings account with a balance of £50,000. They have wills which leave assets to each other on the first death.

Sadly Paul suffers a fatal heart attack. His estate is valued as follows:

Property £300,000 (60% share less mortgage)
Life assurance benefit £100,000
Savings Account £25,000
Total £425,000

Assets passing between UK domiciled spouses are exempt from Inheritance Tax but the same exemption is not afforded to cohabiting couples and therefore the value of the estate above the nil rate band (currently £325,000) will attract Inheritance Tax at 40%. This means Sarah will need to settle a tax bill of £40,000 before probate can be granted.

The tax bill could have been easily avoided simply by writing the life assurance policy in trust so that it did not form part of Paul’s taxable estate. This would also mean that the proceeds would be available immediately without the need to wait for probate to be granted which can take many months.

The position could have been considerably worse had Paul and Sarah not written Wills. Under the laws of intestacy, where there are no children, cohabiting partners do not receive anything and Sarah could have found herself co-owning the house with Paul’s parents.

David Anderson is a Chartered Financial Planner with Concept Financial Planning

Concept Financial Planning Website