And finally…discussed retirement income with your partner? No, neither have a quarter of UK couples
Nearly a quarter (24 per cent) of couples admit they have never discussed retirement income plans with their partner or spouse.
The revelation is one of the findings of Prudential’s latest annual research1 into the retirement aspirations and financial planning of UK couples aged 40 and over.
One in 14 (seven per cent), say they have had a conversation with their partner but have not discussed it again for over 10 years, pre-credit crisis, where personal finances would have been in a very different situation.
Not only are couples not talking about future financial plans, but they are also keeping quiet about their current financial situations. One in five (21 per cent) admit they have not disclosed their exact income to their partner, and one in six (17 per cent) don’t know what their partner earns.
It all adds up to retirement confusion - two thirds (67 per cent) of couples do not have an approximate figure in mind for a joint annual income when they retire.
Nearly half (46 per cent) of couple’s biggest concern for retirement planning is the fear of running out of money. But one in five (20 per cent) are concerned about not being able to help their children or grandchildren when retired, and one in seven (15 per cent) are worried about paying too much tax in retirement. Conversely, a confident 28 per cent of couple’s have no concerns when it comes to retirement planning as a couple.
Despite the majority having some concerns around retirement planning, nearly three quarters (73 per cent) of couples have not taken advantage of pension rules.
Worryingly, one in 11 (nine per cent) women admit they will rely entirely on their parents or spouse’s retirement income, compared to just two per cent of men. A further one in 10 (10 per cent) state they have no retirement savings as a couple and will have to rely solely on the State for income.
However, of those who do discuss retirement income, the average couple estimates they will receive a combined annual amount, inclusive of State Pension, of £31,301.
Stan Russell, retirement expert at 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.”