What are the benefits of a cohabitation agreement?

Most people aren't aware that cohabitation isn't a recognised legal status in England and Wales. This is even though, according to the ONS (Office for National Statistics), we're seeing the highest rates of cohabitating couples since records began. A cohabitation agreement benefits unmarried couples by helping to legally protect both individuals.

💡Editor's insight: "In 2021, there were around 3.6 million cohabiting couples compared with 1.5 million in 1996 according to ONS."

1. Financial protection for both partners

Without a cohabitation agreement, there are almost no financial claims to be made when a relationship breaks down. The agreement can define things like financial contributions for rent, mortgage payments, household expenses, and bills. This prevents misunderstandings and ensures that both partners are financially protected. If one partner contributes more towards property or expenses, this can also be formally acknowledged in the agreement.

2. Clarifies property ownership

If a couple purchases a home together, but only one partner is named on the mortgage or title deeds, the cohabitation agreement can specify the financial contributions of each person and what happens if they separate. Without this, the non-owning partner may have no legal right to the property.

3. Avoids disputes if the relationship ends

Without a formal agreement, dividing assets, handling finances, and determining who stays in the home can lead to disputes. A cohabitation agreement sets clear terms for what happens to shared property, belongings, and financial obligations if the couple separate.

4. Defines responsibility for debts

If one partner has personal debts, a cohabitation agreement can specify that the other partner is not responsible for them. This prevents financial liabilities from becoming a source of conflict.

5. Sets out arrangements for children

If the couple has children, an agreement can explain the financial support arrangements and childcare responsibilities for their future. While it can't override child custody or support laws, it can provide a clear financial framework.

Pros and cons of a cohabitation agreement

When should you draw up a cohabitation agreement?

A cohabitation agreement can be created at any time, but it’s best to have one in place before moving in together. You may also want to draft an agreement if:

• You're buying property together and want to protect your financial contributions.
• One partner earns significantly more and covers most expenses.
• You have children and want to establish financial responsibilities.
• You separate finances but share joint expenses.
• You consider yourselves as 'common law partners'.

What should a cohabitation agreement include?

Each cohabitation agreement is unique to the couple. That said, the following elements are fairly standard to include:

1. Property ownership and contributions

• Who owns the property? (one partner or both)
• How ownership is split if jointly owned (e.g. 50/50 or different shares)
• Financial contributions (who pays the mortgage, rent, or deposit)
• What happens if the relationship ends (e.g. selling the property or buyout options)

2. Household expenses and finances

• How bills, rent, and utilities are shared
• Who pays for major expenses (repairs, renovations, or car payments)
• Whether partners will have joint bank accounts or keep finances separate
• How shared investments or savings will be managed

3. Personal belongings and assets

• Who owns what (furniture, electronics, cars, or valuable items)
• How assets will be divided if the relationship ends
• Whether gifts or inheritances received during the relationship remain personal property

4. Debts and financial liabilities

• Who is responsible for personal debts (credit cards, loans, overdrafts)
• Whether any shared debts will be repaid together
• What happens if one partner accumulates debt during the relationship

5. Arrangements for children

While a cohabitation agreement cannot determine child custody, it can outline:

• Financial contributions for childcare, education, and living expenses
• How parental responsibilities will be divided
• Provisions for inheritance or financial security for the child

6. Inheritance and wills

• Who will inherit shared assets if one partner passes away
• Whether partners have named each other in their wills
• Any financial provisions for dependents or children

💡Editor's insight: "Without a will, unmarried couples don't automatically inherit each other's estate, although they may have a claim for support under the Inheritance (provision for Family and Dependents) Act 1975. For that reason, a cohabitation agreement should be combined with a will for full protection."

7. What happens if you separate?

A cohabitation agreement should set clear terms for what happens if the relationship ends, including:

• Who stays in the home or whether it should be sold
• How shared assets and debts will be divided
• Financial responsibilities after separation (e.g. repaying joint loans)
• Any notice period before one partner moves out

8. Dispute resolution

To avoid court disputes, the agreement can include:

• A requirement to attempt mediation before legal action
• How conflicts over property or finances should be resolved
• The role of family solicitors or arbitrators in dispute resolution

Can a cohabitation agreement be changed after it’s created?

Yes, a cohabitation agreement can be updated or amended at any time, provided that both partners agree to the changes. Life happens, and it’s key to keep the agreement aligned with your financial situation, living arrangements, and future plans.

When should you update your agreement?

It’s a good idea to review and update your cohabitation agreement whenever a significant change happens in your relationship. Some common reasons to make amendments include:

• 🏡 Buying property together: If you originally signed your cohabitation agreement while renting but later bought a home together, it’s important to update the ownership structure and rights to the property. This ensures both partners are fairly protected in the event of a separation.
• 👶 Having children: Bringing children into the relationship changes financial responsibilities, from childcare costs to education expenses. Your agreement can be updated to outline financial support arrangements and provisions for their future, ensuring clarity and fairness.
• 💷 Changes in income or financial contributions: If one partner earns significantly more or takes time off work (e.g. for childcare or study), the financial balance in the relationship changes. Updating the agreement can help redistribute financial responsibilities fairly.
• 🏡 One partner moves into the other's property: If one person owns the home and the other moves in, updating the agreement can clarify things like mortgage or bill contributions.
• 🏦 One partner inherits money or assets: If one partner receives an inheritance, they may want to protect it from becoming shared property. Updating the cohabitation agreement ensures that inherited assets are clearly defined as separate property.

Are cohabitation agreements legally binding in the UK?

A cohabitation agreement is not automatically legally binding, but if properly drafted and signed, courts will recognise it as a legal contract. The Law Commission has shared the view that “insofar” as cohabitation agreements are lawful, and that they are governed by ordinary rules of contract. To ensure enforceability:

• Both partners must enter into the agreement voluntarily
• It must be fair and reasonable
• Both partners should seek independent legal advice
• A solicitor will draft the agreement correctly so it holds up in court.

Does a cohabitation agreement still stand if you get married?

If you later get married, your cohabitation agreement may no longer be valid. You may need a prenuptial agreement to cover financial arrangements within the marriage.

What's the difference between a cohabitation agreement and a prenuptial agreement?

While both documents outline financial arrangements, they have slightly different purposes. If you plan to marry, you may want to replace a cohabitation agreement with a prenuptial agreement for better protection.

What happens to a cohabitation agreement if one party dies?

If one partner dies, the agreement does not override a will. Without a will, cohabiting partners do not automatically inherit, so it’s important to have both a cohabitation agreement and a will.

Government proposals for Cohabitation Reform explained

Currently, unmarried couples in the UK have very limited legal rights, even if they’ve lived together for many years. In recent years, the government have discussed cohabiting couples' rights extensively. However, since the latest General Election, the Labour manifesto has not given as much strength to creating a Cohabitation Reform - it broadly said they intend to "strengthen the rights and protections available to women in co-habiting couples".

Why is cohabitation law under review?

Unlike married couples or those in a civil partnership, cohabiting partners:

• Do not automatically inherit their partner’s assets if they pass away
• Have no legal right to a share of property or financial support after separation
• Face complex legal battles if ownership of assets or financial contributions are disputed

As more people in the UK choose to live together without marrying, legal experts argue that the law needs to evolve to reflect modern relationships. In particular, the Women and Equalities Committee brought a strong argument to the government in 2022 outlining the state of urgency.

📌 Proposed changes in cohabitation law

The UK government has not yet introduced specific legislation, but some proposed changes under discussion include:

• Automatic legal rights for long-term cohabiting partners: Cohabiting couples who have lived together for a certain period could gain automatic legal rights regarding property, financial support, or inheritance - similar to married couples.
• Improved financial protection for surviving partners: If one partner passes away without a will, the surviving partner currently has no automatic right to inherit. Proposed reforms could allow cohabiting partners to inherit property or financial assets, preventing financial hardship after bereavement.
• Greater recognition of financial contributions: Under current law, if one partner supports the other financially (e.g. paying more of the mortgage, covering bills, or taking time off work for childcare), they may not be entitled to compensation after separation. Legal changes could ensure that financial contributions are recognised fairly.
• Possible legal frameworks similar to civil partnerships: Some legal experts propose introducing new legal protections for cohabiting couples, similar to civil partnerships, allowing couples to gain rights without needing to marry.

What should cohabiting couples do now?

Although no legal changes have been confirmed yet, the best way to protect your rights as a cohabiting couple is to:

• Create a cohabitation agreement to clarify financial responsibilities
• Write a will to ensure inheritance rights
• Seek legal advice before making financial commitments (e.g. buying property together)

Having a legally sound cohabitation agreement remains the most effective way to protect your rights, regardless of future legal changes.

Find a cohabitation agreement solicitor today

A cohabitation agreement is a valuable legal document that protects unmarried couples financially and legally. Whether you’re moving in together, buying property, or sharing financial responsibilities, a cohabitation agreement solicitor can help you put a fair and enforceable agreement in place.

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