Most married people in the dark over spouse's pension pot value

Almost four in five (78 per cent) married people yet to retire, equivalent to just over 15 million individuals, have no idea about the value of their spouse’s pension savings, according to LV.

The firm’s quarterly Wealth and Wellbeing Monitor found that 85 per cent of non-retired married people, or 16.5 million people, were not aware of the tax efficiencies of planning retirement with their partner.

Almost half (47 per cent) of non-retired married people said they had not spoken to their spouse about their retirement plans.

Ignorance of a spouse’s retirement savings was only slightly diminished among those with assets of between £100,000 and £500,000 excluding property, with more than half (60 per cent) still not intending to plan their retirement finances with their spouse and 78 per cent saying they were unaware of the benefits of planning retirement together.

Due to this lack of knowledge about the benefits of planning retirement as a couple, LV released a list of tips which included advice that a higher earning partner approaching the lifetime allowance or annual allowance could opt to pay additional contributions into their partner’s pension.

Additionally, the firm urged married savers to consider the death benefits and inheritance tax benefits of pensions, as well as making sure a partner is aware of who to contact about pensions if their spouse dies.

LV managing director of savings and retirement, Clive Bolton, said: “Most people have a good idea of what their house is worth, and the same attitude should apply to their retirement funds. After a lifetime of saving, the value of a retirement fund can be worth as much as a property so it’s important that people know how much their retirement savings worth and the potential death benefits they offer.

“The best way for people to ensure they have the retirement they want, their pension income lasts throughout their retirement and that they avoid unnecessary tax bills is to consult a financial adviser. This is especially true for people who plan to retire within the next five years.”

Additionally, he urged couples not to rush into requesting their full tax free cash entitlement immediately “unless a large lump sum is needed for a specific purpose”.

Bolton concluded: “If flexibly accessing a pension, it can often make sense for couples to retain most of the tax-free cash entitlement until a later date, looking to utilise the personal allowance (and potentially the basic rate tax band) to draw tax efficient income instead.”

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