Ask anyone in a relationship for some of the most common mistakes that they and their partner make and they'll probably say it's to do with poor communication or perhaps not prioritising each other.
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it → ask → other
It's unlikely that forgetting to claim a lucrative tax exemption or ignoring each other's risk tolerances will be on the list.
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forgetting → forget → list
But most couples inadvertently make a whole string of financial mistakes that could cost them hundreds of thousands of pounds over the course of a long relationship.
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that → make → relationship
Here, financial experts share nine of the most common slip-ups that couples across the country are making – and what you must do now to avoid falling foul.
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you → share → what
Failing to discuss money goals with each other
Talking about money with a partner can be awkward.
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Talking → fail → partner
But avoiding it means you could be less likely to reach your goals because it can create a financial blind spot between you.
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it → avoid → you
Alice Haine, of investment platform Hargreaves Lansdown, says: 'Couples who make decisions together are more likely to be on track with their savings, home ownership goals and their pensions.'
Sharing goals creates a joint financial accountability between partners.
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Sharing → say → partners
However, just 25 per cent of couples agree to tell each other everything about their finances while 26 per cent share some information, Hargreaves' research reveals.
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research → agree → information
Haine recommends thinking of common goals for your money, whether that's a short-term goal such as a summer holiday next year or a medium target like a new sofa or refurbishing your kitchen.
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that → recommend → kitchen
Avoiding talking about money means you could be less likely to reach your goals because it can create a financial blind spot between you.
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it → avoid → you
Equally, hiding money troubles can quickly lead to them spiralling out of control.
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them → hide → control
Two in five debtors are keeping their growing burden a secret from someone close to them, according to research by financial firm Aviva.
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debtors → keep → Aviva
Sarah Coles of AJ Bell says: 'Not being honest about money problems can feel like you're protecting your partner.
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you → say → partner
But the longer it goes on, the worse it gets.'
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it → go → ?
Living together without an agreement
More than 3.5million unmarried couples who cohabit are risking a financial disaster if they fail to have a key document in place.
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they → live → place
If you are unmarried and break up, you have no automatic protection, no matter how long you have been together.
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you → break → protection
The Government is working on a set of reforms to give cohabiting couples more protections, but these plans are far from becoming law.
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plans → work → protections
For now, however, a cohabitation agreement could save you thousands of pounds.
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agreement → save → pounds
This is a legal document that sets out who owns what, who gets joint assets in the event of a split and how property will be divided.
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property → set → split
It can lay out who owns pieces of furniture, who will keep a shared pet and how joint savings will be distributed, for example.
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savings → lay → example
You don't need to go to a solicitor to create one, but it is advised that you do.
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you → need → one
At the very least, couples should write out their intent on a piece of paper and sign it in front of a witness, says divorce lawyer Vanessa Lloyd Platt.
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Platt → write → witness
But remember, a court can disregard a cohabitation agreement if it isn't deemed fair or reasonable.
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it → remember → agreement
Not claiming useful marriage allowance
If you and your spouse earn vastly different amounts, you may be able to claim for marriage allowance.
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you → claim → allowance
This tax trick allows married couples – where one spouse earns below the £12,570 income tax threshold – to share their allowances.
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spouse → allow → allowances
The lower earner can 'give' the higher earner, who must be a basic-rate taxpayer, up to £1,260 of their unused personal allowance each year.
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who → give → allowance
This shields a larger portion of the higher earner's income from taxes, saving as much as £252 a year.
Thinking about your pensions separately
When you're saving for retirement through your employer and building up various pensions, it may seem easier to keep your savings separate from those belonging to your partner.
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it → shield → partner
But you should think about your pensions together, Coles says.
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Coles → think → pensions
It could save you tens of thousands of pounds, in the long run.
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It → save → run
For example, if you give up work or go part-time to look after children, your partner could consider paying into your pension.
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partner → give → pension
This way, you'll still get 20 per cent tax relief on the savings and you are protected for later life in case the relationship goes south.
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relationship → get → life
If you and your spouse earn vastly different amounts, you may be able to claim for marriage allowance
Or, if you are both working and one of you is a higher taxpayer than the other, you may consider prioritising the higher earner's contributions.
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you → earn → contributions
This is because you will benefit from a higher rate of tax relief, which will boost the overall pension pot.
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which → benefit → pot
When it comes to retiring, one of the biggest mistakes couples make is opting for a single annuity over a joint one.
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couples → come → one
Annuities provide a guaranteed income for life and can be taken out individually or as a couple.
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Annuities → provide → couple
Single annuities typically pay higher amounts, but when you die the payments stop.
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payments → pay → amounts
If you instead take out a joint annuity, then after your death your partner will continue to receive a portion of your income.
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partner → take → income
This might be all or half, for example, depending on the policy you select.
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you → depend → policy
Not making full use of savings allowances
If you are lucky enough to be one of the 1.8million people who max out their £20,000 individual savings account (Isa) tax-free allowance each year, you could make use of your partner's allowance, too.
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you → make → allowance
For example, let's say you've saved £20,000 into a cash Isa and you have an extra £5,000 to save.
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you → let → 5,000
…and 47 more, not listed.
The Aporia
