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Gay couples will get equal pension rights

The Government is to introduce a civil partnership registration scheme that recognises gay relationships for the first time, leaving the financial services industry to ponder what impact it will have.

The proposals, which the Government will consult on next summer, have cross-party political support.

The move would permit gay couples to benefit from the same pension, inheritance and property rights as married couples. It is believed that the proposed civil partnerships would be restricted to gay couples, not cohabiting different-sex couples, as gay couples do not have the option of legal marriage.

Questions have been raised about how the proposals would be funded in final-salary schemes, with some advisers claiming that the additional cost could cause more schemes to close while others claim the costs would be minimal.

The announcement is too late for the changes to be incorporated into the Pensions Green Paper.

Scottish Equitable pensions development manager Margaret Craig says: “We need to see more detail to see how it will work. Some aspects could be accommodated quite simply but others such as divorce would be more difficult as all the legislation is written in terms of legal marriage.”

Pinsent Curtis Biddle partner Robin Ellison says: “This is not going to make much difference. Pension schemes are still allowed to discriminate between married and unmarried couple but most do not. We are just catching up with the Americans.”

Social exclusion minister Barbara Roche says: “The practicalities of introducing partnership registration for gay couples, with rights and responsibilities attached, are complex. But the case for doing so is clear, and I believe, strong.”

Compass IFA director Chris Morgan says: “I reserve judgement until I see how it will recognise same sex pension rights and inheritance. At the moment, gay couples are subject to IHT at the full rate.”

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