One in three couples aged over 40 don’t talk about financial planning and risk old age poverty, new research indicates

News - Savings

Written by Ray Clancy

Wednesday, 25 August 2010 08:19

One in three UK couples aged over 40 know nothing about their partner’s finances and risk old age in poverty by failing to understand or discuss retirement finances, research shows.

People are simply failing to talk to one another about financial planning for their retirement, according to new research from Prudential.

The study found that nearly a third of couples, 32%, aged 40 and above but not yet retired say they don’t know or understand the details of their partner's retirement savings, with more than a fifth, 22%, saying they have never talked to their partner about financial planning for retirement.

The findings also reveal that women are even less likely than men to discuss financial planning for retirement with partners, with almost a quarter of women, 24%, saying they have never discussed this, compared to almost one in five men, 19%.

And a further 12% of women and 11% of men say they know nothing about their spouse or partner’s finances and they’re not really interested. This lack of interest could be compounding low levels of financial awareness, the research says.

Experts suggest that couples should make a will, discussing pensions and how much to save, talk about when to retire, work out retirement income, review total savings, research annuity options and when to buy, check National Insurance contributions, talk about housing options, leaving an inheritance, and agree on long term care.

‘It is incredible that so many people do not know the details of their partner’s retirement savings. Essentially, this could mean millions of UK adults are banking on hope as their core retirement strategy and are approaching what is arguably the most important financial decision without a full understanding of their household financial situation,’ said Andy Brown, investments director at Prudential.

‘It'’ astonishing that one in 10 men and women say they’re not interested in their partner’s retirement savings arrangements. Couples should strive to have open conversations with one another but they also should aim to be constructive and use these conversations to begin laying the foundations for their retirement planning. The reason this is so important is because the longer retirement planning goes unresolved the harder it is for couples later in life to try and get a decent financial retirement plan in place,’ he added.

When asked about their spouse or partner’s finances, those in the North admitted to having the lowest levels of awareness or understanding while those in the South East and East Midlands claimed to have a much better grasp.

The research also found that affluence plays a critical part in the extent to which couples talk to each other. Almost three quarters , 73%, of those surveyed who said they had discussed financial planning for retirement with their partners within the past year have a household income of more than £70,000 per annum while half, 50%, of those surveyed have a household income of less than £20,000 per year.