Financial planning is going to be a tough sell for Valentine’s Day.
But while it might not be traditional, like overpaying for the set menu in an overcrowded restaurant, getting together over a romantic candle-lit spreadsheet could just be one of the most rewarding things you do as a couple this side of the tax year end.
This article isn’t personal advice. Pension and tax rules can change, and benefits depend on your circumstances. You can normally access the money in a pension from age 55 (rising to 57 in 2028). If you’re not sure if an action is right for you, ask for financial advice.
Why is financial planning as a couple important?
The HL Savings & Resilience Barometer found that couples financially planning together are in a much better position overall.
These households typically have £328 left at the end of the month – up to £100 more than where everything is left to one partner.
Plus, households that plan together have £3,145 in savings accounts. This is almost ten times as much as households where just their partner makes decisions.
Also, the fact that both partners are planning for life’s milestones means they’re more likely to be on track with home ownership (44% compared to 32% who leave it to a partner).
Planning for retirement as a couple
Planning retirement together can make a huge difference to what you end up with. Talking through what you want your retirement to look like, and how you can get there together, means you’re both working towards the same goal. If you leave it solely in the hands of your partner, you might be in line for a nasty shock when you realise what they’ve saved won’t give you the retirement you hoped for.
It's not just that they’re in a better position financially, planning together also means couples are able to take advantage of key tax breaks. And at this time of year, working together can save you a significant chunk of tax.
If you’re married or in a civil partnership, you can share assets between you without any tax implications, doubling the amount of money you can shelter from tax.
So, even if one of you has the lion’s share of the income or assets, you can use this to both take advantage of your ISA allowances this year and again at the start of the new tax year. Together you could protect up to £80,000 in the next few months. You can also take full advantage of both your pension allowances.
For any assets outside of an ISA or pension, you can transfer assets between each other to make best use of your dividend and capital gains tax allowances .
Find out what else you need to know about this year’s rates and allowances.
Where should my partner and I start?
Financial advisers say their clients often visit as a couple to get advice together. It can be a great way of finding the right plans to suit you both, especially when you struggle to come to an agreement on your own.
To get the ball rolling, here are some sensible questions to ask each other.
Do we want to run all our finances together, or just parts of it?
How do we feel about how we split our costs?
Do either of us have obligations to ex partners and children to consider?
What are the most important things for us to have in life as we go along?
What things are important enough to save for? And how much do we need?
What have we put aside so far?
How equal are our savings and investments, and does it matter?
What are we prepared to sacrifice to hit these key financial goals?
Do we share the same plans around having a family?
Do we have the same home ownership goals?
Do we want the same things from retirement?
When do we want to retire?
If one of us has a larger pension, are we comfortable with that?
Will there be any financial issues when one of us (eventually) dies?
Are we happy to pass assets to one another to save tax?
Considering financial advice?
If you think you or your partner could benefit from getting expert financial advice from a professional, get in touch with our advisory team today. You won't get personal advice on the call, but they'll talk you through the advice service we offer, including charges and connect you with an adviser if you'd like to go ahead.
Our advisers can recommend how you can make the most of your tax allowances through financial planning. But if you need complex tax calculations, your adviser might recommend you speak to an accountant to complement their advice.