Why retirement planning for two can make a lot of sense

MoneyPlus Features Team

If you have a partner, spouse or ‘significant other,’ planning your retirement together can make a lot of sense. And by this we don’t just mean what you’re going to do in retirement but also how you’re going to fund it. Using both your savings pots could lead to a higher joint income in the years ahead, and in addition you may be able to make your future income more tax efficient.

A retirement built for two

You probably have joint bank accounts and a joint mortgage. But planning your retirement income together might not have occurred to you, as you’ll have separate pensions, and perhaps investments held in your own names too.

However, did you know that retired couples are more likely to enjoy a comfortable standard of living than single retirees? According to our analysis, over half of retired couples have a ‘comfortable’ or ‘moderate’ living standard as defined by the Pensions and Lifetime Savings Association’s Retirement Living Standards, whereas 61% of single retirees have a standard of living defined as ‘minimum’ or worse.

So retirement planning together can clearly bring benefits, but the reality is that only one in four people currently using our Retirement Advice service are planning jointly.

There’s plenty to think about

As you and your partner head towards retirement, there are some big decisions ahead, meaning a lot to think about. And some of these decisions are irreversible and could affect your lifestyle for years to come. This is where expert retirement advisers can really come into their own, and help take the pressure off.

Here are just some of the things you and your partner may need to think about:

  • Have you fully considered the lifestyle you want in retirement, and how much it will cost, factoring in things like home improvements, new cars, holidays and potentially care in later life?
  • Do you have a realistic idea of how much money you could have to live on in retirement? Our retirement income report takes only five minutes to complete and can help give you a picture of your overall life savings.
  • Should one partner be paying more into their pension now because they’re on a higher rate of tax, and so get more tax relief?
  • How will you take your pension savings? As a regular income? Or as lump sums, either regularly or ad hoc? Or would it make sense for one or both of you to set up an annuity to give you a guaranteed income for life?
  • Did you know you pay tax on pension income, whereas you don’t when you take money from an ISA? Could your future plans for how you take your money be more tax efficient?
  • If you’re keeping some or all of your pension savings invested, what kind of investments do you want to keep your money in over the years ahead to make sure they last as long as you need them to?
  • Have you thought about the fees and product charges on all your pensions and how these could be reduced?
  • If either of you has a final salary-type pension, when will you start to receive an income from that?


If you’d like to take the first step in getting the answers to some of these questions, why not join one of our free webinars. You’ll get a chance to hear how we’ve helped other customers plan and achieve a retirement to look forward to, and ask our retirement advisers any questions you have.

Alternatively, if you’d prefer personal advice to help you build a robust retirement plan, you can book a free consultation with one of our retirement advisers. Getting advice could help you and your partner feel prepared and much more confident. And if a planning session reveals a gap between your dream retirement and the current reality, sound advice now could help you to close that gap.

One real couple making real plans

One of our advisers talked to Doug and Sheila*, aged 66 and 63 respectively. Doug was just three months away from retirement and keen to set up an income from his £340,000 pension savings. Although Sheila was still a few years from retirement, we recommended a planning session together so our adviser could consider all of their pension and non-pension savings, Sheila’s current income, their two State Pensions and their tax allowances. We then put all of this into one cohesive plan.

Our adviser’s projection will allow them to spend £51,900 a year up to the age of 90, rather than the £39,700 which would have been possible on Doug’s finances alone. The advice also recommended that Doug didn’t take money from his pension savings earlier than he needed to and helped ensure he wouldn’t pay more tax than he had to.

Both Doug and Sheila said they really valued the planning conversation. They felt things had been explained well to them. Under the plan set up by our adviser, Doug’s pension savings and Stocks & Shares ISA were brought together in one place, using a low-to-medium risk investment strategy, which aims to provide them with the income they want. They would also save £390 a year in product and investment charges.

It’s important to remember that all investments can go down as well as up in value, and may be worth less than was paid in.

Benefit from holistic advice

By speaking to an adviser with your partner, you can get a holistic view of your future finances. Together you can consider how to achieve the income you want, plan your future spending and saving, investigate the tax implications and make sure you’ll be comfortable in the years ahead and when one person dies.

According to the Stanford Center Longevity report **, if a retired woman is widowed, she’s more likely than a man to face a financial shock. If a retired man is bereaved, he’s more likely than a woman to face an emotional shock. So joint planning now is a way to really prepare for difficult events in the future.

The best time to plan is now

It’s never too late (or too early) to take action and ensure that the years ahead, when you don’t want to be working, can be as comfortable as possible.

If you want to get an idea of where you and your partner are right now and the type of future you can look forward to, why not book a free consultation with one of our advisers.

Even if getting from where you and your partner are now to what you dream of in retirement seems like a big leap, speaking to an expert could bring you closer to that dream - and more quickly than you might imagine.


Book a free consultation Use our retirement income report


*Clients’ names have been changed.

**Stanford Center report:


The information in this article should not be regarded as financial advice.

Laws and tax rules may change in the future. Your own circumstances also have an impact on tax treatment.