Couples risk leaving pension planning too late
Fewer than half of UK couples aged 40 and above have discussed seriously how much money they need to save for retirement, despite reaching a critical age for retirement planning.
The findings, from research conducted for Prudential, reveals that just 42 per cent of UK couples aged 40 and above have discussed how much money they have saved so far for their retirement and how much money they think they'll need to live on in retirement.
Just 16 per cent of couples who have discussed retirement planning say they had a detailed discussion with their partner and subsequently agreed a firm plan for funding their retirement.
This compares to almost half (48 per cent) who said they had talked about the main retirement issues with their partner - making a will, when to retire, how much they have saved, types of pensions - but after the conversation didn't actively do much in the way of further financial planning.
Just 10 per cent of couples who had discussed retirement planning had subsequently seen a financial adviser. A further 10 per cent said they had made specific retirement income choices and set up relevant retirement savings or pension products in preparation for their retirement.
Vince Smith-Hughes, head of pensions development at Prudential, said: "Addressing retirement planning and talking to your partner about how you will fund your retirement is critical. It may seem obvious, but the earlier couples do this the more time they have to make a difference.
"If you are over the age of 35 and you haven't talked to your spouse or partner about financial planning for retirement then now is the time to do it. Even if you're a couple in your 30s or 40s establishing a career or possibly bringing up children, you should still focus on your retirement savings. Clearly saving enough to retire in comfort takes many years of preparation to ensure your money has enough time to grow and provide a sufficient income in retirement.
"Couples' retirement income needs will be all the greater as they need to cover joint living costs but they also have the huge advantage that they can balance their savings to maximise the tax advantage and accelerate the rate at which their investments grow. A simple example is to determine if they are planning to use both personal allowances in retirement, which often doesn't happen. Good planning could lead to almost £20,000 a year of tax-free income.
"We urge anyone aged 35 and older who has not yet spoken to their spouse or partner about retirement saving to do so and we strongly encourage them to speak to a financial adviser to ensure they are taking the most appropriate action."
Gemma Goodman, head of operations at The Annuity Bureau, added: "I can't stress enough how important it is for couples to talk about retirement finances. But what's probably even more important is that once you've had that conversation with your other half you then go on and do something about it. Together you should find out what options there are for you, and the internet is a great place to start with this, or go and see a financial adviser who can help you plan for your retirement.
"But most of all, don't leave it too late. Retirement finances need a fair amount of thought and careful planning to make sure you've got enough money to see both of you through your retirement."
To help people prepare for their retirement, Prudential has produced a decade-by-decade guide to the conversations couples need to have at pru.co.uk/couplesconversations. Suggested subjects include making a will, discussing pensions and how much to save, talking about when to retire, working out retirement income, reviewing total savings, researching annuity options and when to buy, checking National Insurance contributions, talking about housing options, leaving an inheritance, and agreeing on long term care.