Three months after their wedding, Pete and Jo return to Manchester from Australia and immediately find Pete's mum, Audrey, living with them after she is evicted from her sheltered housing. Audrey's arthritis keeps her, and consequently Pete and Jo, awake so Jo suggests marijuanaas a way of easing her joints. They obtain some from a local dealer and Audrey moves into new accommodation at the end of the episode. Karen and David are living separately and trying to get an amicable divorce. Karen meets Mark (Sean Pertwee), the man she had an affair with, for the first time since the Sydney trip, who suggests she gets a better financial settlement from David. David hires a new solicitor, Robyn Duff (Lucy Robinson), who suggests using Karen's alcoholism as grounds for a custody battle. Adam feels sidelined as Rachel spends every waking hour with baby Matthew, and he walks out of his son's naming ceremony, saying he does not love him. Rachel reveals her obsessive coddling of the child is because she once dropped him on the floor. Ramona (Jacey Sallés) falls for swimming instructor Lee (Richard Armitage) at a health club.
Pete and Jo are investigated by immigration officials, who have suspicions that their marriage is staged so Jo can get a visa. Pete begins to doubt her love for him when he discovers an email in which she says she would "Do anything to stay in the country". Pete's trust in Jo is shattered, and the marriage begins to collapse. As Rachel's maternity leave draws to a close and she returns to work, Adam is made redundant. He takes Matthew to a parent and child group and fails to keep up with a singalong but eventually secures a new job while Rachel is away. Karen and David's divorce proceedings escalate as Robyn pressures David to seek custody of the children. The two later spend the night together while Karen encourages Mark to bond with the children for the sake of their resumed relationship. After an incident leaves Josh in tears, Mark tells Karen he can love only her, not her children, and leaves. Karen and David resume their amicable divorce, while Ramona and Lee spend the night together.
Adam and Rachel learn that their rented house is to be auctioned and they begin to look for a new place to live. Adam's estranged father, Bill (Ian McElhinney), arrives but Adam wants nothing to do with him. Bill tells Adam that his mother stopped the contact between them after he had an affair with a man and Adam reluctantly tries to bond with him. Jo and Pete slowly mend their marriage but, on a trip away, she sleeps with Lee, who has asked Ramona to move in with him. Feeling guilty, Jo confesses the affair to Karen. David avoids Robyn's calls after their personal feelings affected the divorce petition but when they make up, he decides to introduce her to his friends. Adam finds a house, though Rachel is not so keen on it. Bill later offers to make up the difference so they can afford their current place, and Adam goes to the auction. He wins the bidding and phones Rachel to tell her the good news. Seconds after she hangs up, her car is hit by a truck. Her friends gather at her hospital bedside where, despite Adam's optimism that she will recover, she dies from her injuries.
Adam sees Rachel everywhere as he and his friends gather for her funeral. Pete's ex-wife Jenny (Fay Ripley) arrives at the church, heavily-pregnant. As she has nowhere to stay, Jo invites her to hers and Pete's house. Adam shows no apparent signs of grief as he returns to work almost immediately. Concerned, his friends visit him, but he rejects their help until he sees Matthew crawling; what he has lost overwhelms him and he goes to see Karen. Pete and Jenny grow closer as he bonds with his son. Lee asks Ramona to marry him, causing Karen to reveal his affair with Jo and leaving both Ramona and Pete furious with their partners. The group travels to Portmeirion to scatter Rachel's ashes. When they get back to Manchester, Pete tells Jo he wants a divorce and she decides to go back to Australia. Jenny moves back in with Pete, suggesting he pretend to be the father of her unborn chld. David resumes his relationship with Robyn, and Karen and Ramona plan a break in Spain. Adam packs his belongings and phones his father, leaving Manchester with Matthew.