Couples keep their money to themselves

Author:
AIG

22nd November 2019

• Just a fifth of monthly income is transferred into joint accounts
• More than half value financial independence over pooling their cash
• Nearly one in seven either don’t trust their partner or are not trusted by their partner

 

New research¹ from AIG Life Limited shows that couples transfer an average of just a fifth of their monthly pay into a joint account as they value financial independence over pooling their cash.

The research with more than 3,000 adults found couples are not opposed to sharing their money – more than three-quarters (77%) split some of it with partners – but in practice they prefer to keep it to themselves.

More than half (54%) say financial independence is important to both of them and nearly a third (31%) say financial independence is important to them. For 15% trust is an issue with 9% saying they don’t trust their partner and 6% admitting their partner doesn’t trust them.

The nationwide study, which is part of AIG Life’s research into the societal impact of living to 100, found just over one in six (17%) couples keep their finances entirely separate – highlighting how most couples are potentially at risk if they or their partner is unable to earn.

Among those who share their cash, most of the money goes into individual accounts with 56% deposited in a personal current account and 10% into an individual savings account. Just 19% on average goes into a joint current account and around 7% into a joint savings account.

The table below shows how the typical couples’ monthly income is split among different accounts.

Donald MacLean, Chief Financial Officer at AIG Life, said:

'It’s entirely understandable that because financial independence is valued couples generally only share finances up to a point. But, even when managing money separately, there can still be issues if partners still rely on each other financially to some degree and something bad happens to one of them.

'According to the Association of British Insurers, one million workers find themselves unable to work every year due to prolonged sickness or injury. Experiencing a sudden loss or drop of income can create an enormous financial burden on families and it is important, even if people feel pooling their income could see them lose control, that couples understand the other partner’s finances.  It’s important to have a financial safety net in place.

'It’s good to see people want to be independent but we recommend they take stock as couples and be selfless too by financially protecting themselves for the sake of their loved ones.'

 

The nationwide study shows just 1 in 20 people are totally financially dependent on their partner (5%), with 1 in 10 of those aged between 18 – 34 in this position. Comparatively, only 3% of adults aged 55+ and 4% between the age of 35 - 54 are entirely financially dependent on their partner.

However, that can change if an individual’s finances are affected by sickness. AIG’s Income Protection can ease the financial pressure and fill a vital monthly income gap when someone is too ill to work. It can also pay a monthly benefit of up to £1,500 if a spouse or partner has to give up work to care for the other.

 

Regional findings

Financial independence is most important to couples in the North West, Northern Ireland and the South East with 66% rating it highly. Couples in the Yorkshire & The Humber are the least concerned with only 39% regarding it as important.

¹ Research conducted by Opinium among a representative sample of 3,000 UK adults between 23^rd and 28^th May 2019