Moving forward together: The importance of retirement planning as a couple


Talking about the future is natural in the early stages of a relationship. You have probably been involved in a conversation along the lines of:

“Where is this going?”

“When will we get married?”

“Do we want to have children?”

Hopefully, you made it through those discussions and are now looking forward to leaving work and enjoying your retirement together. Unfortunately, it seems that the older we get, the less we talk about how we envision the rest of our lives. Especially when it comes to retirement planning.

According to research from Prudential, almost a quarter (24%) of couples have never discussed retirement plans.

But, talking to one another and making plans as a couple is likely to improve your quality of life as you get older, as well as helping you to avoid some common retirement planning pitfalls.

The effects of not communicating

67% of couples do not know what their combined retirement income will be, which means that they are not able to plan for the cost of care or know who long their money will last when they finish working.

Furthermore, a fifth (21%) have never talked about their salary with their partner and 17% don’t know how much their other half earns. Such a lack of communication could lead to misunderstandings, or, ultimately, the breakdown of the relationship.

According to Prudential, 9% of women plan to use their spouse or parents’ retirement income and provisions to fund their own lifestyle. Without any discussion, this could come as a shock to their spouse; especially if they have only made provisions to support their own living costs in later life.

The benefits of planning as a couple

Making sure that you are both involved in planning for retirement and any decisions made regarding later life finances can:

Keep you both on the right track

5% of people say their biggest fear surrounding retirement planning is not knowing what their partner is planning. Deciding to plan as a single unit, rather than individuals will mean that you are both kept in the loop and know how future financial decisions will affect your household.

A further 5% are afraid that their partner may be reckless with their retirement fund. However, there is a higher chance of your other half spending money irresponsibly if they are not following a plan which has been crafted with both partners’ goals in mind.

Help you to give more to loved ones

A fifth of people are worried that they will not be able to help their children or grandchildren during their retirement. Knowing your combined retirement income will help you to budget properly and determine whether you have the surplus cash to offer a helping hand to loved ones.

Make your retirement income last

Almost half (46%) of people say their biggest retirement fear is running out of money. It is much easier to know how long your retirement income will last, if you know what you are working with. By planning your retirement as a couple, you can combine your incomes and know what you have.

Maximise your retirement income

The earlier you begin retirement planning as a couple, the longer you have to make up any shortfall and ensure that you will have enough money to support you both in retirement. Having more time to plan means you can increase your National Insurance contributions to get more State Pension as well as putting more into your personal or Workplace Pensions to produce a larger retirement income in later life.

Stan Russell, retirement expert at Prudential, commented: “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.”

How can a financial adviser help?

Other fears held by those who are starting to think about retirement planning include:

  • Making mistakes in retirement planning (21%)
  • Facing unnecessary tax bills (15%)
  • Falling victim to retirement scams (12%)
  • Do not know where to find help/guidance (11%)
  • Getting overwhelmed by the available retirement income options (10%)

Engaging with a financial adviser can help you to overcome all these concerns, as an individual and as a couple.

If you are finding it hard to understand retirement planning, or create a plan as a couple, why not talk to us and we will help you to find your way.

For more information, or to get started, please content Sarah or Bev on 0115 933 8433.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. Your pension income could also be affected the interest rates at the time you take your benefits.

Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.