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Money secrets risk couples’ financial futures

Money secrets risk couples’ financial futures

Category: Money

Updated: 13/12/2013
First Published: 13/12/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Two studies released this week have shown the worrying trend of couples keeping finances secret from each other, something which could not only compromise current family budgets but could seriously jeopardise future financial stability as well.

The first report, released from the Debt Advisory Centre, showed that nearly a quarter (22%) of adults in the survey had secret debts that they concealed from their partner or families, with this "hidden debt" being particularly common amongst the younger age groups.

Although half of those keeping quiet had less than £1,000 to repay, a third owed between £1,000 and £5,000 and a particularly worrying one in ten owed more than £10,000, a figure that could easily risk the finances of a family.

But, it isn't just young families that keep quiet about money issues. A separate study, this time from Prudential, found that in 22% of couples over the age of 40 there was one partner that kept debts hidden from their other half.

These debts add up to an average of £7,800 per couple – a considerable sum, particularly for those approaching retirement, a time when they'll need to focus on generating a long-term income. Excessive debts could easily get in the way of having a comfortable retirement, and by not discussing such issues it's putting the livelihood of both parties in jeopardy.

It isn't just debt couples hide from each other either. Twenty-six percent of those surveyed admitted to having a secret stash of money which they hadn't told their partner about (with an average savings pot of £4,000) while 13% had never told their partner what they earn.

Of course, in many cases there are perfectly valid reasons for keeping finances separate, but failing to discuss the likes of debt could easily threaten couples' future financial comfort – particularly during retirement.

That's why couples are being urged to be more open about their finances to ensure they can effectively plan for their future. It may be an awkward conversation, but it'll be vital to ensure debt can be effectively managed and a stable income can be generated for the long-term.

What next?

Secret or not, you need a savings account that makes your money work harder. Compare our pick of the best.

Consider consolidating smaller debts onto a 0% balance transfer credit card.

Check out the best personal loan rates to clear debt for good.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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