Half of couples risk leaving partners without income

Almost half of couples over the age of 40 have failed to make financial arrangements to ensure that their other halves will continue to receive an income on the death of their partner

Nearly 1 in 5 women plan to rely on their partners’ retirement savingsold couple

Just two in five (42 per cent) couples over the age of 40 in the UK have made arrangements to ensure that one partner will continue to receive a retirement income after the other dies, according to new research from Prudential1.
Almost half of couples over the age of 40 have failed to make financial arrangements to make sure that their other halves will continue to receive an income on the death of their partner

Women are most at risk, with nearly one in five (18 per cent) planning to depend entirely on their other halves for their retirement incomes, compared with just two per cent of men.
The insurer’s annual Couples’ Conversations study, which provides insights into the finances of  co-habiting couples over the age of 40, also found that joint retirement planning discussions have declined over the past twelve months.

Nearly half (47 per cent) of couples have never discussed the impact that one partner’s death could have on their current pension arrangements – a 13 per cent increase since last year.

Couples in the North East are the least likely to have made joint retirement arrangements. Almost two thirds of couples (65 per cent) in the region admit to not having made plans to ensure they will continue to receive an income in retirement, should they outlive their partner. Those in the Eastern region are the most savvy when it comes to financial planning, with nearly three quarters (72 per cent) claiming to have some arrangements in place.

Vince Smith-Hughes, retirement income expert at Prudential, said: “When a couple is planning for retirement, it is understandable that they would want to focus on the positives – like what they will use the extra time for.

“However, putting some time aside to discuss sensitive issues, like life after the death of your partner and the financial implications that it might have, is a vital part in ensuring the right financial arrangements are in place for the future. These conversations are especially important for those who are planning to rely on their partners for their retirement income.

“The changes to pensions and how people can access their retirement incomes announced in the Budget in March will provide savers and retirees with more choices. As a result, it has never been more important for couples to discuss their retirement planning arrangements. There is plenty of free information available on this issue from independent organisations such as The Pensions Advisory Service (TPAS), while a consultation with a financial adviser or retirement specialist will help many couples to plan more effectively together for the future.”

The study shows just one in five couples (20 per cent) have shared pension saving arrangements, while 65 per cent have their own individual arrangements. One in ten (11 per cent) have made a will but won’t have any other financial arrangements in place should they find themselves in this unfortunate situation.

For further information on how couples can successfully plan for retirement together and for Donna and Vince’s hints and tips on having the right conversations, please see our Couples’ Guide

Table One: Joint Retirement Arrangements

Prudential table

1 in 5 couples has no financial plan for retirement

New research from Prudential has found that couples in the UK are happy to talk about their money, but struggle to turn these conversations into concrete financial plans for the future.


The annual survey, analysing attitudes to money and retirement planning among co-habiting couples aged 40 and over, found that nearly four in five couples (79 per cent) have discussed their finances in the last year, but more than half (52 per cent) admit that these conversations haven’t led to them agreeing a target figure for their joint retirement incomes.

  • 4 in 5 couples have discussed their finances in the last year
  • But more than half have failed to turn these conversations into financial plans for the future
  • Nearly 1 in 5 couples don’t even know where their main retirement income will come from

This figure rose to more than two thirds (67 per cent) among couples aged 45 to 54 – the crucial years in the lead-up to retirement.

This failure to turn conversations about money into actual plans for the future is further demonstrated by the fact that although nearly three fifths (61 per cent) of couples over the age of 40 have discussed retirement planning in the last year, one in five (18 per cent) still admit to not knowing where their main source of retirement income will come from.

Even more worrying is the fact that a quarter (25 per cent) of couples over the age of 40 have retirement funds that will only provide an income for life to an individual – rather than to their partners as well.

Prudential’s research took place six months after the Chancellor of the Exchequer announced sweeping changes to pensions, savings and retirement income choices in the 2014 Budget. Three-quarters (74 per cent) of couples over the age of 40 said that they are aware of the changes, and 29 per cent of them have discussed the implications with their partners.

However, despite this apparent awareness of the choices and opportunities now facing savers and retirees, only one in five (20 per cent) couples over the age of 40 say that one or both of them has consulted a financial adviser in the last five years, and only one in 10 (nine per cent) have had a joint meeting with their spouse and a professional adviser or retirement specialist. Meanwhile, the vast majority (70 per cent) of couples have never seen a financial adviser to discuss their retirement plans.

Vince Smith-Hughes, retirement expert at Prudential, commented: “The gulf between those who are aware of retirement issues and recently announced Budget changes, and those who discuss the implications openly with their other halves is alarming. However, simply having conversations about money is not enough. Taking action always needs to be the next step.

“For many couples, the first step to agreeing and securing a target income in retirement should be seeking professional financial advice together. As retirement becomes a more immediate prospect, a professional adviser or retirement specialist can help couples to make the right decisions about generating an income in retirement.

“Independent organisations such as The Pensions Advisory Service (TPAS) provide information free-of-charge to couples who are embarking on those often tricky initial conversations about retirement planning.”

Donna Dawson, psychologist and relationship expert says: “Although money appears to be a straightforward black and white issue about numbers, it is actually a very complex and emotional subject. Money discussions can often lead to disagreements between couples – misunderstandings, sulky silences and angry rows.

“One way to reduce the emotional impact of financial discussions is to write things down, so that the options can be viewed by both partners objectively. Writing down the pros and cons of situations can help to clarify and contextualise the issues. Once couples start to discuss their finances, they should stick with the discussion until they find a solution – calling in a financial adviser if necessary.”

Friendship more valued than money after retirement

Friendship, good health and avoiding supermarkets at weekends are the biggest unexpected pleasures of retirement for Britons, new research has revealed.

Oddfellows logo
According to a study by the Oddfellows Friendly Society, we significantly underestimate the value of each of these joys as we approach a life of leisure.
It’s only when we finally reach retirement that we come to realise the true worth of companionship, staying active and steering clear of the aisles on a Saturday.

The research surveyed almost a thousand over-50s to gauge how near-retired and retired people view their place within their own communities and society as a whole.
Just under half of those who took part were members of the Oddfellows, which was founded more than 200 years ago and is one of Britain’s largest friendly societies.

Its annual Friendship Month will see the Society’s 146 branches stage scores of special events to connect old and new friends throughout September.
Oddfellows Chief Executive Officer Jane Nelson said: “What our research shows is that it’s perfectly possible for life to begin at 50, 60 or even 70.

“The very simple message that emerges is that if you approach retirement in the right way you can become happier as you get older.”

Some 45% of study respondents aged in their 50s said spending time with friends was what they were most looking forward to about being retired.
Yet nearly two thirds of participants aged in their 70s said they considered it the most enjoyable element.

Similarly, only 31% of those in their 50s said they were most looking forward to a healthier life – while 56% of those in their 70s said it was the thing they valued most.
The biggest disparity was for not having to visit supermarkets at weekends, which was chosen by just 12% of non-retired participants but 24% of retired respondents.
Selected by over 60% of those questioned overall, less stress was the aspect of retirement that was both most looked forward to and most enjoyed.

The research also highlighted the strong links between friendship, happiness and a sense of worth within the community for Britain’s over-50s.
Some 80% of Oddfellows members described themselves as happy or very happy, and 49% recommended joining societies or clubs as the best way of making new friends.

In addition, only 9% of 70-somethings said they didn’t feel they had a meaningful role to play in their own community, compared to 22% of 50-somethings.
Mrs Nelson added: “Our research shows that the reality of retirement doesn’t necessarily meet expectations for a lot of people.

“Many simply look forward to having a lot more time on their hands, but that can translate into loneliness, a lack of purpose and a longing for social interaction.
“Above all, people often discover that they miss the kind of camaraderie and everyday engagement that they took for granted in the course of their working lives.
“As our own members attest, membership of clubs and societies can bridge the gap between expectation and reality by providing friendship and a genuine sense of belonging.”
The Oddfellows helps 280,000 members in the UK enjoy the social side of life, as well as providing care, advice and support in times of need.

Professor Tarani Chandola, of the University of Manchester, a leading expert on the links between work, stress, friendship and happiness, backed the findings.
He said: “There’s a wealth of research on how people with stressful jobs get a temporary boost in happiness upon retirement, but this boost isn’t sustained by everyone.
“Older adults who remain socially active in community and voluntary organisations like the Oddfellows are the ones most likely to maintain their happiness in retirement.”
Life can begin at 70: the Oddfellows’ tips for a happy retirement
·        Maintain existing friendships and build new ones
·        Join clubs and societies to expand your social circle
·        Stay mentally and physically active
·        Acquire new skills
·        Shop on a Wednesday!
The Oddfellows Society is one of the largest and oldest friendly societies in the UK. Its branches organise active social programmes and provide help and support to members in local areas. Members also have access to an advice line, care support and a range of financial benefits. Membership is just £30 a year (or £28 by direct debit).

1 in 4 middleclass pensioners will work past 70

Nearly a quarter of middle class workers aged over 50 delaying retirement until they are at least seventy, according to new research from wealth managers Heartwood.



The research further reveals that:


·         Almost two thirds expect to enter semi-retirement

·         Four in ten (41%) are planning to remain in work for an average of five years longer than they had originally planned.

·         Yet only 31% of retired people said they had been semi-retired and on average they were in semi-retirement for less than two years prior to leaving work for good.

·         33% of higher-earning semi-retirees said they couldn’t afford to while 18% blamed the higher cost of living

·         20% said they needed to keep working in order to support their children and 18% cited the fall in the value of their pension


The new study by Heartwood1 suggests that semi-retirement among wealthier people is becoming an increasingly necessary and complex life stage, with nearly a quarter (24%) of middle class workers aged over 50 delaying retirement until they are at least seventy. Almost two thirds (63%) expect to enter semi-retirement and four in ten (41%) are planning to remain in work for an average of five years longer than they had originally planned. This is a growing trend, as in contrast only 31% of retired people said they had been semi-retired and on average they were in semi-retirement for less than two years prior to leaving work for good.


It is expected that this movement will continue over the coming years, enhanced by the announcement this week that the default retirement age in the UK has now been fully abolished, making it easier for people to put off full retirement for longer. 


For the majority, this is not driven by a love of their job but by concerns of their ability to fund their retirement. When asked why they were delaying full retirement, a third (33%) of higher-earning semi-retirees said they couldn’t afford to while 18% blamed the higher cost of living.  One in five (20%) said they needed to keep working in order to support their children and 18% cited the fall in the value of their pension.


Simon Lough, Chief Executive of Heartwood comments: “Longer periods of semi-retirement are increasingly becoming the norm amongst even wealthier people in their fifties and sixties. In many cases they are being faced with greater demands being placed on their pension pots, rises in the cost of living and unexpected financial commitments such as supporting their children for longer than they originally anticipated. 


“Even compared to a year ago the number of semi-retired people has grown by 43% and we would expect this trend to continue as economic pressures force people into having to generate additional income for longer, making it more important than ever to start planning as early as possible.”   


Heartwood offers retirement planning services, usually in parallel with investment management. These services cover the entirety of retirement planning and management from initial review and plan construction, through retirement and into ‘drawdown’2. Heartwood can provide advice on a range of pension scheme arrangements including SIPPs, SSASs, stakeholder and employer schemes, although the primary focus is on SIPP and SSAS arrangements.      


For further information on Heartwood, visit www.heartwoodgroup.co.uk.



The figures quoted in this release are based on an independent survey conducted by ICM. A total of 830 adults aged 50 and over were interviewed.


2 Drawdown is a form of pension arrangement that allows you to take your maximum tax free cash at the outset and defer your annuity purchase.


Heartwood provides integrated investment, tax and retirement planning solutions for ultra high net worth and high net worth individuals from its offices in London and the South East. Heartwood now manages and administers over £1.3 bn of funds for clients.




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Fatties may damage British economy, experts warn

London: As the British take the title of the fatest in Europe, experts warn that the obesity epidemic could damage the economy.

But this could all be changed if talented professionals die early or retire because of sickness.

Professor Martin McKee said that the British Treasury has identified the cost of obesity to the NHS as a major problem but research shows how much healthy people contribute to the health of the economy.

He said: “They remain in the workforce longer and are more productive while they are at work. This is vital as the overall age of the population rises and people are encouraged to retire later.

‘”t is a waste of money investing in training people if they die at 35 or retire in their 50s because of ill health.”

The team at the London School of Hygiene and Tropical Medicine, examined the link between health and wealth in rich countries, and found healthier people have higher earnings.

The study, published in the British Medical Journal, said the current economic wealth of rich countries ‘owes much to previous health gains’.

About 30 per cent of financial growth in the United Kingdom between 1790 and 1980 can be attributed to better health and dietary intake.

Professor McKee said: ‘The overwhelming conclusion is that good health has benefits beyond the individual.

‘The true purpose of economic activity is to maximise social welfare and not simply to produce more goods and services.

‘Since better health is an important component of social welfare, its value ought to be included in measures of economic progress.

‘This has been done successfully in the United States. Similar moves in Europe could provide a new perspective on the investments made through their welfare states.’

40% of over 55s at risk of leaving no inheritance

London: Investment advisors Fidelity International, warn that nearly half of Briton’s approaching retirement age plan to use their other forms of savings to supplement their pension but the vast majority could risk using it all up before they die.

Those who will use their savings to maintain their lifestyle once they finish working will live increasingly longer and therefore many underestimate precisely how much of their savings they will use up.

Fidelity International’s findings showed that nearly three-quarters (70 per cent) of over 55s had no idea how much of their savings they would withdraw to support them through their retirement years.

“People approaching retirement have yet to fully grasp the implications of increased longevity,” said Simon Fraser, president of institutional business at Fidelity.

“People could find themselves in retirement for up to 35 years, almost as long as they spent in their working lives.”

Mr Fraser cautioned against underestimating how much of their savings the older generation would use as burning out all of their investments could mean falling back on state and company pension benefits right when expenses will likely increase due to the need for greater care.

Retire and die, say medical experts

London: Retiring early is not linked to longer life, finds new research published online by the UK’s British Medical Journal.

There is a widespread perception that early retirement is associated with longer life expectancy and later retirement is associated with early death. But no consensus has been reached on the effect of early retirement on survival.

The study took place in the US state of Texas and involved over 3,500 employees of the petrochemical industry who retired at 55, 60, and 65. Participants were monitored for up to 26 years to assess whether there was any survival advantage of early retirement.

After adjusting for factors such as sex and socioeconomic status, the researchers found that employees who retired at 55 had a significantly increased mortality compared with those who retired at 65. In fact mortality was almost twice as high in the first 10 years after retirement at 55 compared with those who continued working.

In contrast, employees who retired at 60 had similar survival to those who retired at 65.

Although some workers retired at 55 because of failing health, these results clearly show that early retirement is not associated with increased survival, conclude the authors. On the contrary, mortality improved with increasing age at retirement for people from both high and low socioeconomic groups.