Why we’re stronger together – even when it’s harder

Why we’re stronger together – even when it’s harder

• Couples who make decisions together are more likely to have enough savings, enough cash left over at the end of the month, be on track for a moderate retirement income and own their own home than those who say they make decisions alone.
• Couples are more likely to own their own home if they plan together (42% compared to 34% who say they go it alone).
• 76% have enough emergency savings to be resilient, compared to 71% of people who make the household financial decisions on their own.
• On average, couples who plan together have £3,132 in savings accounts – more than twice as much as those who say they plan alone (£1,334).
• On average, couples who plan together have £413 left at the end of the month – 14% more than those who say they make all the decisions alone.
• 47% of couples who plan together are on track for a moderate income in retirement – compared to 38% of those who go it alone.

Figures from the HL Savings & Resilience Barometer, July 2024

Sarah Coles, head of personal finance, Hargreaves Lansdown:

“The end of the summer holiday season is bitter-sweet. It’s the end of long, lazy days spending time with your partner with the freedom to do anything you choose. On the other hand, it’s also the end of long, slightly fraught days, of trying to agree on what exactly you’re going to do, and how much you’re going to spend on it.

Reaching an agreement can be so stressful it can often feel easier just to make financial decisions on your own, and almost half of couples say they do just that. Only 57% of couples say they manage short-term money matters together and 58% say they manage the long-term together (Opinium research, April 2024). However, when one of us takes charge, we’re worse off in almost every aspect of our finances – from savings to budgets and pensions.

The HL Savings & Resilience Barometer measures how we’re doing in all sorts of areas of our finances, from debt to savings and whether we have enough cash at the end of the month. It then breaks it down by whether the head of the household makes the big financial decisions alone, or whether they manage things together. It found that those who work together are in a far better financial position.

More of them have enough emergency savings – which is calculated as having the cash to cover at least three months’ worth of essential spending. They also have an average of £50 more left over at the end of the month and almost twice as much in savings accounts. The fact they’re both planning for life’s milestones means they’re more likely to own their own home and be on track with their pension.

It’s not just that they’re in a better position. Planning together also means you are both across your finances and working together towards your goals. It means both your priorities are being considered and that neither of you is set for a nasty surprise further down the line.

The rewards are obvious, but working together is sometimes easier said than done, so if you’re struggling to get on the same page, there are some useful techniques.

1. Talk about money as openly as possible. Your conversations should cover not just where you both stand right now, but also your attitude towards money in general, and what your goals are. It can help you highlight any differences, so you can find ways to work around them, rather than letting them lie at the heart of every argument you ever have about money.
2. Work out whether there’s enough common ground for you to bring your finances together completely. Joint finances can help by ensuring you both have complete clarity, and can discuss every decision. However, it doesn’t work for everyone. If this would just mean constant arguments, or that one of you builds up problems for the other, then steer clear.
3. Prioritise the basics. Some things aren’t a matter of opinion, so can be brought together and automated, so you don’t fall short. Have a joint account for bills, and set up direct debits into this account on payday, and then out to pay the bills whenever they’re due. These are then rows you never need to have.
4. Find the key areas where you disagree and consider keeping those aspects of your finances separate. The money that isn’t going into the bills account can then be spent on the things that make you happy, without having to agree on every penny.
5. Set some financial ground rules for your separate finances. You need rules about things like debt and the money you’re putting into the bills account, and ensure you talk to each other in plenty of time if it looks like you’re going to fall foul of those rules. We all make mistakes, but we need to commit to being honest when we do.
6. If you plan to be together for longer, have conversations about the long term too. Ideally you can have joint savings towards joint goals – although you don’t need to keep this in a joint savings account. You should also have conversations about how you want retirement to look, what you’re doing to make this happen. Then put a plan in place to build the retirement savings you need.
7. Work around long-term disagreements. We don’t always have the same views about balancing long- and short-term priorities. You can’t force this to happen, but you need to stick to your own plans, and be clear about the consequences. Your partner doesn’t have to be as keen as you to save for retirement, for example, but they should know they’ll be on a lower income, and that it’s their choice, so it’s not your responsibility to bail them out. Of course, if you have children together and take on an unequal amount of care, you may pay into one another’s pensions, or agree to share income in retirement if finances don’t allow you both to pay in as much as you would like, but this is very different from someone else just choosing not to think about the future