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Planning for retirement as a couple involves more than just balancing the books - it’s about aligning goals, managing risks, and making the most of your financial opportunities. In a recent Retire Well podcast episode, hosts Matthew and Joe explored how couples can approach retirement planning holistically, combining financial strategy with emotional awareness.
Retirement means different things to different people—and that’s especially true in a couple. One partner may want to retire early, while the other prefers to keep working. Some may phase into retirement gradually, while others stop altogether.
Tip: Start with a conversation. Discuss your ideal retirement ages, lifestyle goals, and how you’ll support each other through the transition.
“It’s really important to understand what retirement means to each of you... someone might want to retire at 55, someone at 65, or one might want to phase into retirement.” — Matthew
One of the key estate planning tools for couples is the nil-rate band, which refers to the amount of your estate that can be passed on tax-free.
Together, a married couple can potentially pass on up to £1 million tax-free on second death.
Jargon buster: Downsizing relief allows you to retain the residence nil-rate band even if you sell your home and move to a smaller property.
It’s common for one partner to take the lead in financial planning, especially if they’re the higher earner. But retirement planning works best when it’s done as a team.
Why it matters:
“It’s about turning that around and saying, how do we use it as a couple? How do we look at maximising both tax allowances?” — Joe
Couples have access to a range of allowances that can be used more effectively when planned jointly:
Jargon buster: Personal allowance is the amount of income you can earn each year before paying income tax, which is currently £12,570.
The state pension is a valuable, inflation-linked income stream. To receive the full amount, you need 35 qualifying years of National Insurance contributions.
If you’ve taken time off work or been contracted out of a pension scheme, you may have gaps in your record. A couple of ways these can be topped up are:
Jargon buster: Class 3 contributions are voluntary payments that help fill gaps in your NI record. They cost just over £900 per year and can boost your pension by £340 annually - a break-even point in just three years.
Think of retirement income as a series of “taps” you can turn on and off:
Coordinating these taps between partners helps optimise tax efficiency. For example, drawing income from the lower earner’s pension before state pension age can reduce overall tax liability.
For couples who prefer certainty, annuities offer guaranteed income for life. A popular option is a single-life annuity with a long guarantee period (up to 30 years), which provides a guaranteed income for life (or 30 years if you were to die earlier than this) ensuring that payments to beneficiaries if the annuitant dies early.
Jargon buster: A joint-life annuity continues paying a reduced income to a surviving spouse, while a guarantee period ensures full payments for a set number of years regardless of death.
Retirement planning for couples is about simplicity, efficiency, and shared understanding. By planning together, making use of available allowances, and preparing for life’s uncertainties, couples can build a retirement that’s both financially secure and emotionally fulfilling.
If you would like to have a chat with us about planning for your retirement, send us an email at retirewell@wealthofadvice.co.uk or give us a call on 0191 384 1008.
If you want a better view of what your future could be, we'll have a chat and work out if we make a good fit for you and your financial picture.
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