11th December 2015
Secret stashes of money and hidden debts are just two of the financial secrets Brits are keeping from their other halves.
One in 10 people confess to keeping a secret stash of savings and investments, totalling £30,300 on average, that their partner knows nothing about and one in seven hide debts from their partner, averaging £8,000, research from Prudential has found.
Millions of pounds of money secrets are being kept in couples and potentially threatening their prospects of a comfortable retirement.
Co-habiting couples over the age of 40 were surveyed by the insurer and were found to be hiding information about savings, debt and income.
One in eight of those surveyed said their partner doesn’t know what they earn and of those who keep some or all secret, more than a quarter do so to maintain financial independence. Another 23% said they hide their earnings to maintain financial security in the case of a break up. A generous one in 10 said they use their secret salary to treat their parent.
Vince Smith-Hughes, retirement expert at Prudential, said: ‘Hiding such significant sums in savings or debts from a partner makes financial planning for the future very difficult. For example, taking unexpected debts into retirement could make a significant dent in the joint income that the couple was expecting to be able to live on.
‘In addition, keeping income or stashes of cash secret could mean that couples are not making the most of the pension saving tax relief or allowances available to them. A consultation with a professional financial adviser should benefit most couples in planning for their retirement, provided they are open and honest with each other about their individual finances.’
There are also many reasons why people choose to keep some aspects of their finances secret. The most common reason is that the savings can be used to fund retirement (29%), followed by concerns about financial security in case of a break-up (27%).
Six in 10 of those with secret debts said they arose from general living costs but one in seven said it was due to overspending as the result of an emotional event. Money spent on holidays and travelling is the main source of debt for 12% of people.
Lots of people do not trust their partner so keep money secrets; 11% of secret savers admit to keeping quiet because they don’t trust their partner to make sound financial decisions.
‘The pension saving and retirement income landscape has changed significantly in the last year and there’s no guarantee that there won’t be further changes around the corner. The Government’s Pension Wise independent guidance service is now available to anyone over 50 with defined contribution pension savings and should prove to be a useful service for most couples looking to make joint decisions about their retirement finances,’ said Smith-Hughes.