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Couples finances not a matter for discussion

4 July 2018

Couples are not discussing their finances, with a quarter (24%) of couples never having discussed retirement income plans with their other half, according to new research by Prudential.

The findings from Prudential’s annual research into the retirement aspirations and financial planning of UK couples aged 40 and over, showed that one in 14 (7%) say they had a conversation with their partner pre-credit crisis, but have not discussed it again for over 10 years.

The research also revealed that one in five (21%) have not disclosed their exact income to their partner, and one in six (17%) don’t know what their partner earns. Not surprisingly, two thirds (67%) are unsure of the exact figure of joint annual income when they retire.

Yet, for almost half of all couples (46%), running out of money remains their biggest concern for retirement planning, followed by not being able to financially help their children or grandchildren (20%) and paying too much tax in retirement (15%).

Despite the majority expressing some concerns around retirement planning, nearly three quarters (73%) of couples have not taken advantage of the pension rules. Worryingly, one in 11 (9%) women admit they will rely entirely on their parents’ or spouse’s retirement income, compared to just 2% of men.

Stan Russell, retirement expert, Prudential, said: “Conversations about finances are never easy, especially if you have not even told your partner how much you earn. It is extremely important to discuss your finances, however, as it is essential to know where you both stand so you can plan for a comfortable retirement.

“Couples who don’t talk and make joint plans, risk losing out on making the most of the pension saving tax relief available between them, not using their full allowances in retirement may also end up with unrealistic expectations of what their savings combined are worth.

“For couples who have never had conversations regarding their personal finances, it is best to seek advice from a professional financial adviser who should be able to inform them of the best way they can maximise their savings and use new pension rules if appropriate.”