We recommend scrapping the two poorly targeted Marriage Allowances, which cost the Treasury £700 million per year, and front-loading the money as a taxable Child Benefit worth £3,000 per year to married mothers with a first child under three.
This would send an important policy signal about the value of marriage, offset a large part of the ‘couple penalty’ which is the single biggest barrier to marriage and stability among the poorest couples, and potentially increase births to married couples by 47%.
Policymakers should be concerned about historically high levels of family breakdown in the UK. Nearly half of all teens are not living with both natural parents. Family breakdown reduces parental resources and is related to higher levels of poverty, father absence and negative child outcomes. The need for financial and other support for lone parent families costs the taxpayer at least £51 billion per year.
Marriage acts as a buffer against the risk of family breakdown. Three UK studies using different national datasets – including my PhD thesis to be published this autumn – show married parents are significantly more likely to stay together compared to parents who never marry. These findings are all independent of a wide range of socioeconomic factors. Intact families are the norm among married families but the exception among unmarried families. While 84 percent of parents who stay together are married, two thirds of parents who split up never married. Yet it is a decade since any government minister made a speech about marriage.
Government policy should actively encourage marriage, but it does not. Except for the two small Marriage Allowances, fiscal policy treats all couples as ‘living together as married’. Yet for the lowest earners, the welfare system is ‘strongly influential’ as a barrier to partnering decisions and marriage. Couples on low income who want to form a stable relationship stand to lose part or all of their benefits by moving in together or marrying. This is known as the ‘couple penalty’.
This systemic barrier to marriage is apparent in birth statistics. Only 18 percent of births in the lowest income households involve married families, compared to more than 70 percent in higher income households.
Since 2015, government has supported marriage through the transferrable Marriage Allowance worth £252 per year per family. This funding would be far more effective and influential if focused on addressing the ‘couple penalty’.