Brits hide debt from their partners
A new report from The Co-operative Bank has revealed the huge amount of debt - £41bn - that people in relationships are hiding away from their other halves, and the legal implications of the secret cash stash.
The study, which is the third in a series of reports by the Bank on ‘Modern Families and Households', shows that many unsuspecting, coupled-up Brits could be sitting on a debt time bomb. And whilst nearly two thirds (62%) of people in relationships have individual debts in the form of credit cards, overdrafts, loans and mortgages, over a tenth (13%) have not disclosed this to their partner.
In an era of recession and austerity, the average debt that individuals in relationships admit to have totals £17,112. Men admit to being £14,228 in the red, however on average women's debt levels are markedly higher, with females admitting to having £22,418 of debt.
This is a modern phenomenon with under 35's experiencing three times more debt than over 35's:
Christina Blacklaws, Director of Family Law at The Co-operative Legal Services, says: "These findings show that there is a huge amount of money that couples are hiding from each other.
"Many people facing relationship breakdown may be shocked to find out that they may have responsibility for their ex-partner's debts, even if they were not aware of them, or may not have any rights to assets or property which they themselves may have invested into. Even if your partner dies, debts may well be passed on to you as an individual or to the estate.
"Legally speaking if a married couple decide to divorce they have to disclose all of their money and assets as part of the process to the Courts, if a pre nuptial agreement has not been agreed. Therefore any hidden cash should not remain secret, and there can be severe consequences should these not be made known.
"Unmarried couples do not have the same rights as married couples, therefore it is important that people who are in this situation know exactly what their rights and responsibilities are. For instance, there are more couples who are drawing up agreements regarding their finances when they move in together nowadays."
The report questioned couples across Britain about their finances in detail, looking at individual and joint accounts and how honest we are as nation when is comes to money:
A fifth of couples (21%) keep their financial affairs completely separate and do not have any joint accounts at all
Over a third (38%) of couples have a joint current account and a quarter (25%) have joint savings accounts
Younger couples are much less likely to hold joint accounts than older couples. For example, 27% of couples aged 25-34 have a joint account in comparison to 48% of 55-64 year olds
Despite the high levels of debt, the findings also reveal that at the opposite end of the spectrum, there is also a substantial amount in savings that other halves are also oblivious to totalling £22.8bn.
On average, £9,517 is squirrelled away in secret accounts. Parents with children aged 19 and over are more likely to have saved up a stash of secret cash over the years with an average of £14,700 in accounts, in comparison to those with dependent children under 18 who have £4,495.
James Hillon, Head of Home and Family at The Co-operative Bank, says: "The report has shone the spotlight on couples across Britain and the level of truthfulness there is between loved ones about financial affairs.
"The findings show that younger people are the most debt laden age group, perhaps unsurprisingly due to university costs and a more relaxed attitude to money, however the average debt in this group is more than £30,000 which is worrying.
"We would always urge people with money worries to contact their bank. And as the old adage goes, a problem shared is a problem halved and being honest with your loved ones about debt is always preferable to being caught out in the long run."