It’s good for couples to talk about their plans for retirement, but too few bother and end up in a financial mess, according to a new survey.
At least a quarter of couples aged 40 have not talked about retirement and half are clueless about how much retirement income they might have and whether their partner is looked after should they die, says the research by financial firm Prudential.
The report also disclosed around two thirds of couples have never sat down with a professional financial adviser to talk about money and retirement.
Kirsty Anderson, a retirement income expert at the firm, said “Couples need to talk this through because their financial plans for retirement can be disjointed.
Lack of knowledge about each other’s money
“After the survey, we realised almost a third of partners have no idea how much money their spouse or partner has set aside for giving up work, whether they have a will or how much money the will continue to receive should their partner die.”
Anderson warned that couples should plan together for the benefit of both or face the prospect of one dying and leaving the other struggling financially in retirement.
The firm found 42% of couples have arrangements to leave each other a retirement income, while 15% believe their partner may have a will but do not know if they will continue receiving any income and 12% have never talked about their retirement income arrangements.
Inheritance tax changes
Won men are more likely to have financial problems in retirement, as a fifth will rely on the State Pension to get by and only a third will have a continuing income if their partner dies, while only 8% of men face the same issues.
“Pension freedoms that allow retirement savers to pass unspent funds on and proposed changes to inheritance tax rules making it easier to leave a family home to children have changed the financial planning landscape in recent months but too few couples realise this,” said Anderson.
“People need to talk with each other and be ready to discuss their finances with a professional adviser who can help them structure their wealth more efficiently.”