24th October 2014
Over half of couples could leave their spouse without retirement income after failing to make arrangements in the event of a partner’s death.
Research by Prudential shows just 42% of couples over the age of 40 in the UK have made arrangements to ensure that one partner will receive retirement income after the other dies.
Women are most at risk as 18% are relying on their partner entirely to fund their retirement, compared to just 2% of men. Just one in five couples have shared pension saving arrangements, while 65% have their own individual arrangements. One in 10 couples have made a will but have no other financial arrangements in place should one of them die.
Unfortunately, nearly half (47%) of couples have never discussed the impact that one partner’s death could have on pension arrangements and this figure has increased 13% since last year.
Couples in the North East are least likely to have made joint retirement plans and 65% said they do not have a plan in place to ensure their retirement income continues should their partner die.
Vince Smith-Hughes, retirement income expert at Prudential, said couples tend to focus on the positive retirement brings, such as extra time, not the negatives.
‘Putting some time aside to discuss sensitive issues, like life after the death of your partner and the financial implications that it might have, is a vital part in ensuring the right financial arrangements are in place for the future,’ he said. ‘These conversations are especially important for those who are planning to rely on their partners for their retirement income.’
Smith-Hughes added that the Budget changes will introduce more freedoms and ‘as a result, it has never been more important for couples to discuss their retirement planning arrangements’.