UK 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 Prudential.
The firm found that 20% couples over the age of 40 has never discussed financial planning for retirement, while 63% 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. 49% have no idea about the level of retirement income they can expect when they stop working while 27% do not know how much money their partner has in pension savings.
The research also identified that many couples are running the risk of leaving one of them in financial difficulties if the worst should happen. 42% of couples have made arrangements for one partner to continue to receive an income in retirement should the other die. A further 15% say that one partner has made a will but no further arrangements regarding a continuing income and 12% have never discussed leaving an income in retirement for each other.
Women are most at risk of being left without an income with 19% relying on their spouse or the State Pension in retirement, compared with just eight% of men. 34% 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, 67% of couples have never discussed their finances with their wider family.
Kirsty Anderson, retirement income spokesperson 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.”