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Our research tells us many married couples don’t know anything about their spouse’s pensions and retirement plans. Planning retirement together can make good financial sense. Here we explore pension tips for couples.
Couples who plan their retirement together can be much better off when they stop working.
Of the non-retired people we recently surveyed, less than 1 in 5 people have discussed their pensions or retirement plans with their partner*.
Not talking to each other about pensions and retirement plans can be a costly mistake. Couples who plan together can be much better off when they stop working.
Most people have a good idea of what their house is worth. It’s a good idea to have the same attitude about your retirement funds. After a lifetime of saving, the value of a retirement fund can be worth as much as a property. It’s important to know how much your savings are worth and the potential death benefits they offer.
Pension tips for couples
- Pay into your partner’s pension: If one partner is a higher earner and is approaching the annual allowance or lump sum allowance, they could pay additional contributions into their partner’s pension.
- Don’t forget the death benefits and inheritance tax benefits of pensions: At the moment, whilst pensions are not subject to IHT at any age, if you die before the age of 75 your pension can be passed to your beneficiaries tax-free. If you’re over 75 when you pass away, there is not any inheritance tax to pay, but pensions are taxed at the beneficiaries’ income tax rate.
From April 2027, any unused pension funds and death benefits payable from a pension, will be included in the IHT calculations if your estate exceeds the tax-free thresholds.
Bearing this in mind, it can make sense to discuss when and how to access a pension and if it would be better to spend any other savings first.. - Avoid unnecessary large withdrawals from a pension fund: Couples should consider how much money they need to withdraw from their pension funds. Drawing too much too quickly can lead to large tax bills.
- Make sure your partner knows who to contact about your pensions if you die: You may have carefully arranged all your finances so that they can be passed to your loved ones in the most tax efficient way possible. However, if your partner hasn’t been part of the conversation, they may make uninformed decisions.
Getting specialist retirement advice
As well as talking to each other, it’s well worth talking to a financial adviser. This is especially true for people who plan to retire within the next five years.
At LV= we’ve been specialising in providing trusted and regulated retirement advice for over 25 years. Learn more about how our retirement advice service can help you plan for retirement and get your pensions ready for the retirement you want to enjoy. You can request a call back from one of our friendly advisers today.
Data Source
*LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2024.
View the February 2025 LV= Wealth and Wellbeing research findings
