The vast majority of people say they would not be financially prepared should their relationship break down – pointing to a need for greater education and better planning, advice firm Portafina has said.
Research from the adviser found 92% of people would not be financially ready to deal with a break-up. It also found 57% of people are not open with their long-term partner about their finances.
The advice business surveyed 1,000 people for its research.
Portafina managing director Jamie Smith-Thompson said the results mean people should take a greater interest in financial education from a younger age to become better prepared when things go wrong in their personal life.
“This would help people to have a strong understanding of money, including how to manage it and the steps you can take to stay financially secure,” he said. “It’s also possible that this would encourage people to be more open when it comes to discussing their finances, which could reduce the levels of secrecy that we found.
“More openness and communication in relationships can really help people create the future lifestyle they want.”
The research also found 40% of respondents had kept an inheritance a secret from their partner and 43% admitted to hiding debts from their significant other.
Reasons for the secrecy varied from feeling uncomfortable because their partner earns more or less than them (16%), being financially hurt by a previous partner (11%) and protecting themselves financially in case of a break-up (8%).
The survey also uncovered differences in pension saving levels between men and women, with 21% of men saying they had saved enough for retirement compared to 7% of women.
The pension gender gap can be blamed on career breaks taken by women throughout the course of their lives and lower salaries, according to research out earlier this year.
Smith-Thompson (pictured) said of his firm’s research: “It’s not unusual for friends or colleagues to talk about money when things get tight before payday, but we wanted to know just how far these conversations go and how much we share.
“We were surprised to find that more than half of those in relationships don’t discuss details such as salary, debts and savings with their partner, with debts being at the bottom of the sharing list.
“While some people see this as a way of protecting themselves in the future, the benefits of sharing important financial details and knowing about potential pressure points – such as debts or changes to retirement planning – should not be underestimated.”
IFS Wealth & Pensions director and IFA Ricky Chan he was surprised by the results.
“[The 92%] figure is very high,” he commented. However, he said in his experience older couples were more likely to keep financial secrets.
He said one of his older female clients had recently lost her husband and “was now not sure how she was going to tackle retirement”.
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