While the majority of couples (86%) believe they have a healthy approach to discussing money, new research from L&G reveals that for many, this confidence doesn’t extend to long-term planning. One in five (18%) admit to arguing frequently about finances, while 17% avoid the topic altogether,
This avoidance has led to a growing trend L&G has dubbed the ‘financial situationship’. It describes long-term partners who share their lives but keep their finances completely separate, and it affects more than a quarter of people in relationships (26%). That’s a staggering 8.7 million people across the UK who are essentially guessing their partner’s financial habits and future plans.
L&G surveyed 3,000 UK adults in a relationship, found that this financial separation isn’t a short-term phase. On average, couples wait nearly five years before they ‘go official’ and begin managing their finances together.
To help couples navigate this and start these important conversations, L&G has launched a quiz to help you uncover your financial love language and better understand your financial style.
Love is blind when it comes to long-term finances
While most people have a good grasp of their partner’s salary (78%) and monthly bills (75%), the picture gets blurry when looking toward the future. The research shows that love is truly blind when it comes to long-term savings and debt. Over a third of people (36%) have no clear understanding of their partner’s pension savings, and a quarter are in the dark about their partner’s investments (25%) or unsecured debts (24%).
Retirement planning appears to be the biggest blind spot. Nearly one in five couples (18%) have never discussed it at all. A further 10% are planning for retirement individually, without talking about how they might combine their finances in their later years.
Paula Llewellyn, CEO, DC & Workplace Savings at L&G, comments: “Our research shows couples are often confident talking about short term finances but when it comes to long term planning, many are putting off the conversation. Although understandable given rising living costs and immediate financial pressures, avoiding those bigger discussions entirely can risk leaving people underprepared for the future they’re working towards.”
“Talking openly about money might feel awkward at first, but the aim is to build a habit around it,” Llewellyn continues. “Making [big decisions] together can reduce future stress and ultimately give both partners more freedom and confidence in what lies ahead.”
How to start the conversation
Financial Adviser and Author Bola Sol believes that talking about money is key to building a strong future as a team. “Money is a tool we all have to use, and if couples don’t figure out how they’re aligned with their finances, it can cause real mismatches: from the house they’ll buy to how they’ll retire,” she says.
Bola shares her top tips for couples:
• Pick the right time and place: Don’t catch your partner off guard. If they’ve had a long day, suggest talking another time, but don’t put it off indefinitely.
• Consistency is key: Make chatting about money a regular habit, whether it’s monthly or every couple of months.
• Think ‘one income’ for the long-term: When planning a future together, reframe your mindset from ‘my money’ and ‘your money’ to ‘our money’. This helps you plan as a team.
To find out more, and take L&G’s Financial Situationships quiz to help you uncover your financial love language, please click here
