Let's talk about...anything but money
30 October 2015
- One in five couples aged 40+ have never discussed retirement planning
- Nearly half have no idea what their retirement income will be
- Only two in five have ensured retirement income will continue if one of them dies
Britain’s couples are putting their plans for a comfortable retirement at risk by avoiding talking to each other about their finances, according to new research by Prudential1. The insurer found that one in five (20 per cent) couples over the age of 40 has never discussed financial planning for retirement, while nearly two thirds (63 per cent) say they have never met as a couple with a professional financial adviser to discuss retirement planning.
Each year Prudential surveys couples aged 40-plus on their retirement aspirations and their attitudes to financial planning, and this year’s results show how a reluctance to discuss finances is leading to confusion about their retirement realities. Nearly half of couples (49 per cent) have no idea about the level of retirement income they can expect when they stop working while 27 per cent do not know how much money their partner has in pension savings.
The research also identified, worryingly, that many couples are running the risk of leaving one of them in financial difficulties if the worst should happen. Just two in five (42 per cent) couples have made arrangements for one partner to continue to receive an income in retirement should the other die. A further 15 per cent say that one partner has made a will but no further arrangements regarding a continuing income and 12 per cent have never discussed leaving an income in retirement for each other.
Women are most at risk of being left without an income with nearly one in five (19 per cent) relying on their spouse or the State Pension in retirement, compared with just eight per cent of men. Only a third (34 per cent) of respondents said their retirement income will continue to be paid to their partner if they die.
Despite the pension freedom reforms having made it easier for savers to pass on their pension pot to nominated individuals after death, two thirds (67 per cent) of couples have never discussed their finances with their wider family.
Kirsty Anderson, retirement income expert at Prudential, said: “Financial planning for retirement is the most important step in making sure couples spend their years after work happy and comfortable. However, it seems that many couples are putting the retirements they’re looking forward to at risk by shying away from conversations about their finances.
“Keeping quiet about financial planning for the future can impact retirement income in many ways. For example, couples may not find themselves taking advantage of the maximum possible tax relief on pension savings, they could have unrealistic expectations of what their savings will be worth, or they could be sleep walking into a situation where one partner is left with no income at all.
“Most couples, whether they’re just starting out with their planning for the future or whether they’re in the run up to retirement, will benefit hugely from a joint consultation with a professional financial adviser about their pension saving and retirement income options.”
Notes to editors
1 Research conducted among 1,019 UK adults aged 40-plus who currently live with their spouse or partner by Consumer Intelligence on behalf of Prudential between 7 and 17 July 2015.
Radio interviews via ISDN or various smartphone apps can be arranged on request.