24% of couples have never discussed retirement income plans with their partner or spouse, according to Prudential’s latest annual research into the retirement aspirations and financial planning of UK couples aged 40 and over.
7% say they have had a conversation with their partner but have not discussed it again for over 10 years, pre- credit crisis.
Meanwhile, 21% admit they have not disclosed their exact income to their partner and 17% don’t know what their partner earns.
67% of couples do not have an approximate figure in mind for a joint annual income when they retire.
46% of couple’s biggest concern for retirement planning is the fear of running out of money. But 20% are concerned about not being able to help their children or grandchildren when retired, and 15% are worried about paying too much tax in retirement.
Conversely, 28% of couples have no concerns when it comes to retirement planning as a couple.
Top 10 concerns as a couple about retirement planning
|Running out of money||46%|
|Have no concerns||28%|
|Making mistakes in retirement planning as a couple||21%|
|Not being able to help children/grandchildren when retired||20%|
|Facing unnecessary tax bills||15%|
|Falling victim to financial fraudsters in retirement||12%|
|Do not know where to find help/guidance||11%|
|Too much choice over retirement income options||10%|
|Not knowing partner’s retirement plans||5%|
|Partner being reckless with our pension fund||5%|
Source: Prudential 2018
Despite the majority having some concerns around retirement planning, 73% of couples have not taken advantage of pension rules.
Worryingly, 9% of women admit they will rely entirely on their parents or spouse’s retirement income, compared to just 2% of men. 10% 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 specialist 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.”
Stuart Wilson, B2B channel marketing director at More 2 Life, added: “Today’s research from Prudential that shows that two out of three (67%) of couples have no idea of what their combined retirement income will be is a real concern as this lack of knowledge will clearly hamper long-term planning. Our own data shows that 31% of equity release customers over the age of 70 are widowed. This highlights the fact that as a household moves from potentially having two sources of retirement income to one, the remaining spouse often needs to look for additional support to meet the shortfall.
“With 24% of couples not discussing retirement income plans with their partner or spouse, this drop in income may well have come as a nasty shock to some. Taking your time to consider your combined assets including your home – with the help of a specialist adviser – and how these can work for you across the whole of our retirement is vital and will help people to deal with the fear of running out of money.”