Conversations about money aren’t being turned into plans for the future.
Couples in the UK are happy to talk about money, but are struggling to make financial plans for the future.
That’s according to a new survey from Prudential, which looked at attitudes towards money and retirement planning among co-habiting couples aged 40 and over.
It found while four in five (79%) couples aged 40 or over had discussed their finances in the last year, over half (52%) admitted these talks hadn’t led to setting a target for their joint retirement incomes.
The lack of financial planning was found to be worse among couples at a crucial age leading up to retirement (45-54), where more than two thirds (67%) failed to make a plan.
And while well over half (61%) of couples aged 40 or over had discussed retirement planning in the last year, 18% admitted they still didn’t know where their main source of retirement income will come from.
Worryingly, Prudential found a quarter of couples have retirement funds that will only provide enough money for one person.
Reforms
The survey was conducted in June, six months after sweeping reforms on pensions, savings and retirement income choices were announced in the 2014 Budget.
The centrepiece was simplifying ISAs by merging Cash and Stocks & Shares ISAs into a single New ISA, or NISA, and raising the savings limit to £15,000.
Pensions were also overhauled with the requirement to purchase an annuity with pension savings scrapped.
Prudential’s survey found that nearly three-quarters (74%) of couples aged 40 or over were aware of the reforms but only 29% had discussed the implications with their partners.
Vince Smith-Hughes, retirement expert at Prudential, said: “The gulf between those who are aware of retirement issues and recently announced Budget changes, and those who discuss the implications openly with their other halves is alarming. However, simply having conversations about money is not enough. Taking action always needs to be the next step.”
How to make plans for the future
In order to plan for the future and achieve a comfortable retirement it’s important to take stock of you and your partner's current situation. This means taking a comprehensive look at savings, investments, pensions, assets and debts.
Once you’ve figured out where you both stand you can take a look at how much you think you'll need and how you might get there. For tips on how to do this, have a read of our guide How to work out how much you need to save for retirement.
We can also help with our new Plans app. It gathers and stores all your financial information in one place allowing you to get an instant picture of your current wealth and help you make sure you're on track to achieve the full future you want.
More on investing and pensions:
Why the State Pension is unsustainable