How much does your partner have in their pension? 78% of married people have no idea

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How much does your partner have in their pension? 78% of married people have no idea

by RMI Independent Financial Advice Category: News

Retirement planning as a couple can be difficult. You may have very different ideas about when you want to retire and how you want to spend your time. While it’s something of a taboo subject, understanding what you both want out of retirement and how you’ll create an income can help you get the most out of it.

A survey conducted by LV= found 78% of married people have no idea what their spouse’s pensions are worth. In fact, almost half (47%) have not spoken to their spouse about their retirement plans. While you may not have discussed how much you’re putting away for retirement, planning together often makes sense.

4 reasons to plan your retirement as a couple

1. Create the retirement lifestyle you want

When you think about your retirement, what does it look like? When do you hope to retire?

Without a clear picture of what you want retirement to be, it can fail to live up to your expectations. Setting out what you want your lifestyle to look like can help you get the most out of the next chapter of your life. If you’re planning with a partner, it is just as important to understand what they are looking forward to in retirement as well.

You may have very different goals, from the date you’d like to give up work to the life you’ll build. A conversation about what retirement will look like now can help you create a plan that suits both of you.

It’s common to focus on the big things when thinking about retirement, like a once in a lifetime trip or other big-ticket expenses. However, the day-to-day lifestyle you create in retirement is crucial for long-term happiness and fulfilment too.

2. Understand how to create a retirement income

In retirement, will you pool both your incomes to pay for essential outgoings? Will you share a disposable income?

Many couples will share income and expenses while they’re working and continue this into retirement. If you’ll pay for retirement as a couple, it’s important that you understand the steps you’re both taking to create an income when you give up work. It can help ensure you identify gaps sooner, enabling you to take steps to close them where possible. You could also find that collectively you’ll have more saved for retirement than you thought, allowing you to retire sooner or increase your planned income.

3. Make the most of allowances as a couple

Planning together can reduce your tax bill and help you make your money go further. The LV= survey found that 85% of non-retired married people are not aware of the tax efficiencies of planning retirement together. By not planning together, they could be missing out on reducing their tax liability.

While you’re still saving for retirement, adding to your partner’s pension can make sense. The Annual Allowance limits how much you can tax-efficiently save into your pension each tax year. This is usually £40,000 or your annual income, whichever is lower. If you may exceed this threshold, adding to your partner’s pension can increase how you’re saving tax-efficiently.

Once you’re retired, planning together continues to make sense. Money withdrawn from your pension may be subject to Income Tax when you exceed the Personal Allowance (£12,570 in 2021/22). Spreading withdrawals across both your pensions can help you make use of your Personal Allowances to reduce the amount of tax paid.

Depending on your assets and goals, there may be other allowances that can help you create a long-term income that minimises tax. Please get in touch with us if you’d like to discuss how to save for retirement efficiently.

4. Ensure the long-term security of you and your partner

While it can be difficult to contemplate, it is important to consider how financially secure you would be if your partner passed away, and vice versa. Not planning as a couple can leave a surviving partner in a vulnerable position and potentially struggling financially.

By considering what could happen, you’re in a position to take steps to ensure long-term security for both of you, even if the unexpected happens. This could include ensuring your partner will inherit your pension by completing an expression of wishes, or purchasing a joint annuity so they would still receive a regular income if you passed away.

Start building your retirement plan as a couple

It can be difficult to know where to start when planning your retirement, especially if you have different goals for your partner. We’re here to help you put a long-term plan in place to help you get the most out of your retired life, whether you’re ready to retire now or are still saving for the milestone.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

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. Your pension income could also be affected by the interest rates at the time you take your benefits.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.

What our clients say

I was recommended Paul and Bryony as financial advisers by a friend. My husband and I were particularly interested to think about where to invest our savings. They have helped us to think about what level of risk we are prepared to engage with and explained the different possibilities very clearly and thoroughly, enabling us to maximise the potential of our investments. They also provide regular updates. We have been very pleased with their service and have already recommended them to others.

Dr C Oliver

London

I have been a client of RMI since their foundation. Prior to that, I dealt with the directors for my own personal pension and our business pensions. This relationship as existed for the last 25 years. During this time, I have received first-class support and advice. I have always been kept informed on financial trends and opportunities. To this end I was able to plan retirement early if I wished. More importantly, I was able to choose the right opportunity as when to retire. Since retiring, I continue to receive the highest service and advice on fund management.

Mr. M Moore

Ex General Manager

Leicester

We have dealt with Paul and his staff for over 20 years and have received a first-class service that is completely to our entire satisfaction. We would have no hesitation in recommending the company to anyone who is seeking financial advice.

Mr J Channing

Ex Non-Executive Director, Earl Shilton Building Society

Leicestershire

It’s a great comfort to have Paul Eason and his team on call if I have any queries or concerns about my finances.

Ms M Topham

Oxford

Paul Eason and Bryony Evans have competently managed our investments for the past twelve years. Their service has been managed diligently; they have provided consistency of advice for positive results. This has given us satisfaction and confidence in their ability to handle our personal affairs. Their research and advice are in-depth, concise and clear. They have demonstrated a thoroughness in all aspects of our personal financial planning.

Mr & Mrs S Price

Devon

Following a personal recommendation from a colleague some two years ago, Bryony and Paul provided advice to my wife and myself on planning for my forthcoming retirement. Latterly they have helped another family member on how best to invest a lump sum inheritance. On both occasions, they have guided us through the various options available, indicating the pros and cons in an easily understandable way. They continue to provide regular updates on how the investment is performing. We have always found them to be attentive, knowledgeable and a pleasure to deal with. We would have no hesitation in recommending them to a friend seeking an adviser.

Mr & Mrs P Teasdale

Rutland

When you are investing, you need confidence to make decisive commitments. Paul Eason and Bryony Evans at RMI are true professionals that you can trust implicitly for commercial and personal advice and transactions.

Mr D Matthews

Chairman, Cellular Mouldings Ltd

Northants

RMI not only deal with all our company's employee benefits schemes, but also provide invaluable support for us on a personal level. Nothing is too much trouble and we have found their service to be effective, efficient and friendly. We would recommend RMI to any company or private individual looking for a comprehensive and personal service.

Mr & Mrs I Bates

Ex Directors of The Bright Consultancy Ltd

Bournemouth

Paul and Bryony have advised us for over ten years. They bring strong market knowledge and analysis to provide balanced views for investment decision making. This is then backed up by thorough administration - all delivered in a professional and easy-going manner.

Mr & Mrs I Morton

Concept Shape Ltd

Cheshire

RMI Independent Financial Advisers have been assisting our clients with knowledge and insight into the world of pensions and protection for over 10 years. They have helped many of our company and personal clients navigate their options and meet the legislative duties around pensions and auto-enrolment in the most efficient way, whilst giving them the confidence to plan effectively for their future. We have no hesitation whatsoever in recommending their services to not only our clients, but to other professional connections.

Sunflower Accounts Ltd

Accountants

Wiltshire

Paul has been a trusted adviser to our business for over 20 years and he and Bryony continue to support us with our company pension scheme whilst providing first class financial advice. We would highly recommend RMI for anyone seeking a quality financial advisory service.

Mr J Turner

Managing Director, LINAK UK Ltd

Birmingham

I was looking at my potential retirement options and RMI were able to come up with a bespoke pension solution that enabled me to retire earlier than I had expected.

B Kilfeather

Not knowing how to plan for the future, I required advise about pensions and insurance policies and Paul has helped by being constantly available, calm and pragmatic.

Dr R Singh

Director

Paul was recommended to me by one of his clients and I was looking for a financial adviser who could help with a pension scheme for my employees and also for my personal plan.

Paul helped all the members of my team. He had time and patience and everyone individually with their various circumstances. He was also very helpful with my personal pension during the time I have my business. My personal circumstances have now changed and Paul’s advice has been invaluable.

D Harrison

Business Owner

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