The Prudential seems shocked to find that many couples aren’t entirely honest with each other when it comes to their finances.
The deceptions uncovered were manifold: there were secret squirrel savings accounts, undisclosed credit card debt and personal loans (and occasionally mortgages)- as well as a general lack of truthfulness about how much each earned.
The research found that a surprising one in six said their partner did not know what their salary was. Not surprisingly, in most cases they thought take-home pay was significantly less that it actually was.
In total, the Prudential reckons couples today have ‘millions of pounds’ in money secrets. This make a good headline figure, but it’s worth remembering that there are millions of couples in the UK – so the value of many of these ‘money secrets’ will be relatively small.
The UK’s largest insurance company clearly thinks that honesty is always the best policy and urges couples to have frank discussions about the true state of their finances.
But is this always necessary, or indeed realistic? Just because you’ve moved in without someone you find devastatingly attractive or comfortingly reliable, do they really need to see a spreadsheet that accounts for every last penny you’ve spent?
Of course the answer is no. A few white lies about how much was spent on a new outfit, a night out, or the latest Sky Sports package is probably not going to wreck many relationships.
But if you are setting up home with someone – and paying a mortgage, rent or utility bills together – then you need to feel confident that you can trust them on the bigger financial questions. And an unwillingness to talk about money may mask larger problems.
This research seems to conflate several issues, some of which are far more worrying than others.
Secret debts are clearly a problem for couples – particularly married ones – as a spouse can find themselves landed with credit card debts or personal loans if their other half cannot meet these repayments.
If you’re not married then strictly speaking you shouldn’t be liable for these debts, provided it wasn’t a ‘joint’ credit agreement. Of course, this doesn’t remove the emotional pressure you may feel under to help a partner clear said bills as and when they come to light.
Secret savings are a slightly different matter though. The research found there were two reasons why people stashed funds away.
The first was to protect their savings from a more spendthrift partner. This seems a perfectly sensible strategy to ensure your money is invested for the future, not whittled away on fripperies. Your other half might not be an out-and-out flake, or running up unsupportable debts, but if they have a ‘live for the moment’ mindset there’s a lot to be said for simply not telling them about certain longer-term savings accounts. They’ll probably thank you for it eventually.
The other reason cited was to build a financial safety net, should the relationship break down. Given that one in three marriages end in divorce, and the break-up rate for co-habiting couples is even higher, this might also seen like a sensible strategy. It isn’t foolproof though.
If you are married and subsequently split you are obliged by law to reveal all your assets. If you fail to mention a savings or investment account – and your ex’s lawyers uncover it – there could be serious legal and financial consequences.
Don’t think no-one will spot that little savings account with the Tipton & Coseley Building Society. Divorce lawyers are trained to trawl through bank statements, salary slips and savings to spot where the figures don’t quite add up. Identity checks and credit searches can easily find accounts held in your name, even if you’ve not declared them.
So the ‘financial safety net’ isn’t without holes. However, if you are in a relationship which you feel is financially unbalanced or emotionally unstable, your own savings fund can be the lifeline to help you get out and back on your own feet. Honesty certainly isn’t the best policy if you are worried your partner might take your credit card or try to control your finances.
The website SavvyWoman – which provides financial information for women – has done its own research on financial truthfulness. It points out that many women only discover a true picture of their other half’s finances once the relationship breaks down.
In addition, the research found the older we get the more happy we are to talk about money with a partner. However, among older couples (aged 55-plus) it is women who are more secretive than men. In contrast it is men rather than women in the 18-34 age group who are less honest about their finances.
These type of surveys often focus on how happy we are talking about money with a partner. But the root of this problem may be the need to have a frank conversation with yourself about your finances. Not talking to a partner about money may reflect a head in the sand approach to money issues in general.
This, I think, is the dividing line between taking independent financial decisions – which you don’t feel the need to discuss with anyone – and ‘money secrets’ that can easily spin out of control.
You don’t have to tell your other half that your outfit wasn’t bought in the sales, or the combination of school fees, holidays and car repayments has pushed you into the red for the ninth consecutive month. Similarly you don’t have to show your partner bank statements, salary slips or your credit card bills.
But you do have to take a closer look at these yourself and be honest about whether or not they show your finances slipping out of control. If this is the case then talking about the problem might not be easy, but it’s a necessarry first step in trying to remedy the situation.
Emma Simon is a freelance consumer journalist and former Personal Finance Editor at The Sunday Telegraph
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