Almost a fifth of couples over 40 have not talked about retirement plans

20th November 2013

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Nearly one in five or 19% of couples over the age of 40 have avoided discussing their retirement plans in the last five years while 11% have never discussed it, according to new research from Prudential.

The lack of retirement conversations extends to taking professional financial advice together. Only one in 10 couples over the age of 40 have seen a financial adviser jointly in the past five years  to discuss their retirement plans, while 14% admit that they or their partner have seen a financial adviser alone to discuss retirement planning.

The research results also show that avoiding discussions around retirement can lead to a mismatch in how much money each half of a couple expects to live on in retirement. When asked separately to estimate the couple’s expected joint retirement income, men said £35,100 on average and women £32,000.

It’s also not just retirement planning that couples avoid discussing –  Prudential’s research found that they avoid discussing their finances in general. Some 6% of couples admit they have never discussed their finances together and a further 12% have not discussed money for over a year.

Despite sharing a life together, many couples are also reluctant to lay their financial cards on the table at all. Around 25% keep their current accounts entirely separate, 30% hold savings in separate accounts and 23% maintain separate investments.

This behaviour could be partly as a result of fears that financial conversations will spark arguments. Money is the third most likely subject to cause disagreement among couples, with almost a quarter admitting they fight more about finances than they do about socialising, work, or politics and religion. Family issues, at 33% and household chores, at 27% top the most likely arguments list.

Vince Smith-Hughes, retirement expert at Prudential, says: “For any couple, discussing and agreeing on the best retirement income options for them is as important as keeping their day-to-day finances in order. A joint conversation with a financial adviser or retirement specialist could be an important step in ensuring that the right pension-saving decisions are made, so that both partners can enjoy a comfortable retirement. There is also plenty of free information available from independent organisations such as the Money Advice Service.

“It’s easy for couples to put off conversations about finances, particularly longer-term issues like retirement planning, because it’s difficult to see any short-term impact. But our research has highlighted some worrying trends, in particular the fact that nearly one in five couples approaching retirement, in the 45 to 54 age group, have never discussed jointly their plans for income in later life.”

Table one: Arrangements to share financial products

We only have our own personal one We only have a joint account/share one We have our own personal one AND we share one
Credit card 34% 21% 28%
Current account 25% 31% 42%
Investments 23% 13% 23%
Pension 56% 6% 24%
Savings account 30% 23% 34%

Table two: Topics couples argue about most

Topic % of couples that argue about this
Family/relations 33%
Household chores 27%
Money 23%
Socialising 13%
Work 10%
Politics/religion 7%
Holidays 6%
Choice of friends 4%
Clothes/dress sense 5%
We don’t argue 27%

Table three: Regional breakdown of couples who have not spoken about their finances in more than a year

Region % of couples who have not discussed their finances in over a year % of couples that have never spoken about their finances % of couples that have never seen a financial adviser to discuss retirement planning
South East 21% 8% 66%
London 20% 7% 63%
West Midlands 20% 7% 62%
Yorkshire & The Humber 18% 7% 69%
East 17% 4% 69%
East Midlands 17% 4% 58%
North East 16% 6% 61%
Scotland 16% 6% 57%
Wales 15% 9% 73%
North West 14% 5% 73%
South West 9% 4% 48%

 

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