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Financial planning as a couple could boost your finances, but almost 2 in 5 admit to “financial infidelity”

Research has found that many couples keep financial secrets. While you may want to keep your finances separate for a whole host of reasons, working together could mean your money goes further and you’re more likely to reach your goals.

According to an Aviva survey, 38% of people in a relationship admit to having a secret account or money stashed away that their partner doesn’t know about. The average amount hidden in a savings account is £1,600, and half of over-55s have more than £2,000 squirrelled away.

There are lots of motives for keeping some money to yourself. 32% of people said it was because they wanted to maintain control of their finances. A quarter said it was so they could treat themselves without their partner knowing, while a similar proportion are doing so to create a nest egg for their child.

As well as savings accounts, it’s not uncommon for couples to keep other financial secrets.

Perhaps you haven’t told your partner how much you have saved in your pension, or how well your investments have performed?

Whatever your reasons for keeping some of your finances to yourself, it’s worth considering if creating a financial plan together could be useful.

3 fantastic reasons to plan as a couple

Creating a financial plan with your partner can be incredibly useful and mean you both have more confidence about the future. If you’re not already planning with your partner, here are three fantastic reasons you should think about it.

1. It provides an opportunity to talk about your attitude to money

Money can be a difficult subject to discuss. If you have different views about money from your partner, it can lead to arguments.

The Aviva survey found that 26% of people said they bicker about money at least once a week. Unsurprisingly, the cost of living crisis is putting more pressure on couples, and 34% said they are arguing about money more.

A financial plan can facilitate an open conversation about your attitude to money and how you use it. It’s a process that can help you better understand your partner’s point of view and ease tensions.

2. Benefit from a clear goal that you’re both working towards

Financial planning isn’t just about maximising your wealth – in fact, far from it. The key benefit of financial planning is that it creates a plan that’s designed to help you reach your goals.

So, planning as a couple can mean you’re both working towards the same future. Whether you hope to retire early or are keen to give your children a financial head start when they reach adulthood, a financial plan will be tailored to suit your goals.

Setting this out as a couple can mean you’re both on the same page and motivated to take the steps necessary to secure the future you want.

3. Make the most of tax allowances

As a couple, there may be tax allowances you can take advantage of by planning as a couple.

For example, the Marriage Allowance could lower your combined Income Tax bill if one of you doesn’t earn more than the Personal Allowance, which is £12,570 for the 2023/24 tax year.

Splitting assets between you could also mean you can make the most of tax breaks. Each individual can add up to £20,000 each tax year to an ISA to save or invest tax-efficiently. So, spreading cash between both of your ISAs could reduce your overall tax bill.

Similarly, for the 2023/24 tax year, you can make up to £6,000 profit when disposing of some assets, including investments that aren’t held in a tax-efficient wrapper, before Capital Gains Tax (CGT) is due. As you can pass on assets to your spouse or civil partner without having to pay CGT, doing so could mean you could make profits of up to £12,000 before becoming liable for tax.

Contact us to arrange a meeting with your partner to create a financial plan

Working together towards common goals doesn’t have to mean merging all of your assets. You may choose to keep some, or even all, assets separate. There’s no one-size-fits-all solution when creating a financial plan – it’s about what works for you and your partner.

Please contact us to arrange a meeting to discuss your finances and aspirations for the future. We can help you implement a plan that you feel comfortable with.

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

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

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