Why couples should talk about pensions and retirement plans
Many couples plan their holidays, household budgets and major purchases together, yet pensions and retirement can be overlooked. Research suggests that fewer than one in five non-retired people have discussed their pensions or retirement plans with their partner, potentially leaving one person unaware of important financial decisions[1].
Planning for retirement together makes sound financial sense. After a lifetime of saving, a pension can be a significant asset, potentially comparable to the value of the family home. Understanding what you both have, how much it could provide and what may happen if one of you dies can help you make more informed decisions.
Open up the conversation
A useful first step is to gather details of your pensions, savings and other investments. Understanding the value of each pension, how it could provide an income and what death benefits may be available can give both partners a clearer picture of their financial position.
It can also be worth considering whether pension contributions are balanced between you. For example, where one partner is a higher earner and approaching relevant pension allowances, there may be circumstances in which making additional contributions to their partner’s pension could form part of a wider financial strategy.
Look beyond retirement income
Couples should also understand what could happen to their pensions if one partner dies. The tax treatment of pension benefits can depend on several factors, including the deceased’s age. From 6 April 2027, unused pension funds and certain death benefits will be included in Inheritance Tax calculations if an estate exceeds the relevant thresholds.
This makes it particularly important to discuss when and how pensions should be accessed alongside other savings and investments. Depending on individual circumstances, deciding which assets to draw on first could have implications for retirement income, tax and plans for passing wealth to beneficiaries.
Avoid taking too much too soon
How much you withdraw from a pension can be just as important as how much you have saved. Withdrawing large amounts too quickly could result in unnecessary tax and leave less money available for later life.
Couples should consider their expected spending, other sources of income and how long their savings may need to last. It is also worth allowing for unexpected costs and the possibility that spending patterns will change throughout retirement.
Make sure you both know
It is important that each partner knows where pension information is held and who to contact if the other partner dies. Even carefully considered financial arrangements can become difficult to manage if only one person knows the key details.
Reviewing your plans together can help identify potential gaps and provide a clearer picture of the lifestyle you can afford. Professional advice is particularly valuable for couples approaching retirement, helping them consider their pensions, income needs, tax position and longer-term objectives.
Source data:
[1] LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2024.
This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax and estate planning are not regulated by the Financial Conduct Authority, depend on the individual circumstances of each client, and may be subject to change in the future. For guidance, seek professional advice. A pension is a long-term investment not normally accessible until age 55 (57 from April 2028, unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would affect the level of pension benefits available. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent finance acts. Investments can fall as well as rise in value, and you may receive back less than you invest.