How Couples See Their Money
Love is in the air for many at this time of year, and all over the UK, people are looking ahead, wondering what their next step should be from a financial point of view.
Your relationship might have got serious, and you’re possibly considering pooling financial resources together with your new partner, but you might not know how the typical couple manages their finances in 21st-century Britain.
There are a multitude of different approaches taken by couples to manage their finances. Some prefer to take their time, whilst others commit sooner and put a plan together at the earliest opportunity. To discover what couples actually get up to, NerdWallet commissioned a special survey to look at just how couples really see their money.
Our exclusive survey asked a representative sample of people in couples living in the UK about how they manage their finances, capturing insights from couples living apart or living together, and from couples both young and old, married and unmarried.
With this in mind let’s dig even further into the world of couples’ finances and investigate just how couples see their money.
Did you know?
62% of people in committed relationships have joint bank accounts, as a means of managing their shared finances?
Couples’ finances – what is the new ‘normal’?
If you’re in a couple, weighing up how to best manage your finances in the long term, you may be wondering what the new normal is.
As mentioned, joint bank accounts are an important way for many couples to pool their resources together, to manage their finances as a unit. But which kinds of couples actually use them, and is it something you should wait for, before setting up?
The numbers suggest it might be worth waiting to see if your other half is ready to commit to cohabitation before entering into a long-term commitment like opening a joint bank account.
But what does age have to do with couples’ approach to managing their finances?
We found that 54% of those aged 18 to 34 in a serious relationship used joint bank accounts. Not all of these people would necessarily be married, suggesting that, at the very least, couples don’t have to have already walked down the aisle before sharing their finances with one another.
How does this compare against other generations? Well, 58% of those in serious relationships aged 35 to 54 and 70% of those aged 55-plus we asked said they have a joint account, meaning it only becomes more and more popular as couples grow older.
Since December 2005 same-sex couples have been able to form civil partnerships across the UK and, in 2014, the first same-sex marriages started to take place in England, Scotland and Wales.
Our survey was conducted shortly before the first mixed-sex couple civil partnerships started, meaning the 1.2% of those we surveyed in total who were in civil partnerships are almost entirely likely to be same-sex couples. While civil partnerships don’t encompass the entire LGBTQ+ community, our survey gives something of a snapshot of how a large number of same-sex couples handle their finances together.
One interesting fact that emerged from speaking to those in same-sex civil partnerships was that they were far more likely to be similarly-minded with regards to finance, compared to mixed-sex couples.
Joint bank accounts – who uses them?
The marital status of couples says a lot about their financial habits. As many as 74% of married couples across the country use a joint bank account. In comparison, just 9% of people who have recently entered into what they consider a serious relationship, while still living apart from their partners, decided to open a joint account.
What could be responsible for this more joined-up thinking with same-sex couples in civil partnerships compared to the population at large? Communication is critical, and we have the numbers to prove it.
We also asked those in civil partnerships whether they worried about not speaking openly or regularly enough about their finances with their partner, but just 6% said yes.
Pink News reported in 2009 that same-sex couples have a higher level of satisfaction in relationships and have better communication than mixed-sex couples. This suggests that sharing the same gender as one’s partner could make it easier to resolve conflicts, as they may have a greater understanding of each other and their perspectives. It’s all about being able to overcome differences with your partner, and seeing things from their point of view, even if it’s something that you might think you disagree with.
While joint bank accounts seem like a major life step in themselves, preferred by those who are predominantly married and reaching their mid-30s, not all couples wait that long to get started in looking after their finances in such a cohesive manner.
In some cases, couples don’t actually use joint bank accounts, but use financial arrangements similar to them to handle finances together properly.
Shayne and Bronwen are a young couple in their mid-20s who cohabit, having just had their first child together. They don’t use a joint bank account for reasons that will be made clear shortly, but have found an effective way to pool their resources.
Shayne and Bronwen’s story is one of many up and down the country, and we used our exclusive survey to see just where they fitted into the bigger picture when it comes to finding ways to handle finances as a couple.
Same-sex couples have much to teach us
When we asked those same-sex couples in civil partnerships whether they had a different attitude to their partner on how they wanted to manage, spend or invest their money, only 7% of couples in this demographic agreed.
In contrast, 35% of all people in a serious relationship of any kind, including all mixed-sex and same-sex couples, admitted having a different approach to their finances to their other half.
We asked at what stage of life couples actually sit down and agree to open a joint bank account, and this is what they told us.
As you can see, marriage is clearly a pivotal time at which couples are ready to put their money together, but not all of us marry, and cohabitation is almost equally as popular a time to do so. Shayne, a policy and public affairs adviser, and Bronwen, an executive office manager, while not holding a joint bank account, arrange their finances in a way similar to one, as a cohabiting and unmarried couple.
"Although we don't have an official joint account, we use Bron’s spare current account – we also both have our own current accounts each – for our mortgage payments, insurance payments and as a savings account,” Shayne explains.
“Bills and expenses come out of our individual accounts, such as our train costs, and then we split household bills between us (e.g. Bron pays for our water supply and I pay for electricity and gas). Bron pays for the shopping each week and I pay for fuel. So we, more or less, have the same outgoings and put the same amount into savings."
Is there a gender imbalance at play?
Couples’ finances are a curious balance, especially as no two couples are alike. Not all partners in any relationship necessarily have the same salaries as one another and, in many cases, one person might find that they are unable to contribute as much as their partner.
We were curious to see whether gender played a decisive role in determining how couples’ finances are handled, particularly when it came to those who were ultimately responsible for contributing to them the most.
Men are far more likely to be open about putting more money into joint bank accounts than their partners. Yet, the stats show there is a clear discrepancy when you flip the question and ask people about the contributions their partners actually make. Given that most couples in the UK typically identify as male or female, you might expect the two numbers to be more closely aligned.
Further questioning is needed to explain why these figures don’t match up, but it can still be assumed that, in many couples, men contribute the most to joint bank accounts.
What part could things like the gender pay gap have to play in all of this? It seems like an obvious point to raise, given that the Office for National Statistics (ONS) estimated that women in all forms of work faced a gender-based pay gap of 17.3% in 2019. Are women automatically put at a disadvantage when it comes to couples’ finances, purely based on gender?
Possibly, but it’s more complicated than that – the gender pay gap affects millions of women, yet there is evidence to suggest that the gap itself has actually been shrinking over time (albeit slowly). Perhaps a structural pay gap goes some way to explain the disparity in how much men and women contribute to joint bank accounts, but having a baby could also explain some of these differences.
That’s because mothers often seek part-time work to balance with their family responsibilities, causing them to begin earning less per hour, purely because part-time roles pay less than full-time ones.
As a result, the way in which women are able to contribute to their finances as a couple is likely to be related to the gender pay gap and whether they decide to have a baby.
Something that is most revealing is that, as Shayne explains, some couples choose to forgo joint bank accounts entirely, explicitly because of perceived gender imbalances that can put women at a significant disadvantage, especially if a relationship doesn’t work out in the end.
Bronwen prefers not to have a joint bank account because women can be at a financial disadvantage should a relationship break down. Her concerns aren’t without just cause. Both partners in a married couple could have as much of a shared responsibility for the welfare of a child, but it’s not the case when a couple is unmarried.
In a situation where an unmarried couple separated, on a legal basis, the mother would always have automatic parental responsibility for their child, whereas the father wouldn’t automatically have this responsibility, if they are not listed on the child’s birth certificate from 2003 onwards. In effect, this means the mother can be potentially left literally holding the baby, along with any immediate costs this might include.
Shayne adds: “Bron and I have spoken about opening a joint account (mainly when we got the mortgage) but, quite rightly, Bron is opposed to this, due to the financial inequality women can face when trying to leave relationships (although, of course, we hope that doesn't happen). I respect her position and choice to be able to remain financially independent, especially if something happened between us.”
Finances – a possible source of tension for couples
As we have outlined, issues such as gender can mean that couples start managing their finances with basic imbalances at play, such as women contributing less to joint bank accounts than men, due to one partner having a higher income than the other.
One of the important aspects of sharing finances together as a couple is trust – can a person trust their partner when it comes to money? Not only this, but people can approach finances on an individual level with drastically different points of view to their partners, which can lead to tension when they start preparing a plan for how to manage finances together.
Not all couples will see eye to eye, at least at some point, when it comes to money.
That’s why we asked those in serious relationships about these tensions. As many as 26% admitted that they had argued with their partners in the last year because of their finances and how they managed them.
In addition, we found that 40% of women in serious relationships admitted to being more risk-averse than their partners when it came to financial matters, and showed a preference for saving more money.
As well as contributing less to joint bank accounts, more women show a definite leaning towards being more prudent, keeping an eye on each and every penny. Intriguingly, something we asked those in serious relationships shed some light on where these differences might originate from.
Q: My partner and I earn notably different incomes, and this can be a source of tension for us
This response shows a consistent story, when it comes to incomes and their role in driving much of the tension that couples can experience in managing their finances. It might suggest that most men and women don’t have massively different incomes, or that they do have different incomes but most don’t think it’s a source of tension, or they might simply be unwilling to admit any tension to begin with.
Whatever the situation is, our survey findings still suggest at least one in four couples possibly have heated words, simply because one partner earns more than another.
Anna Jezuita, counsellor and mindfulness teacher at Therapy for Change, says: that minor complaints about how a partner behaves can mask more serious differences in their relationship.
She explains: “Couples come to therapy with complaints that are often seemingly ‘petty’ or ‘trivial’, like different standards of what constitutes a clean house, or what is good behaviour, regarding staying connected versus being controlled (how many text messages and how often). They are complaints about differing strategies to meet similar human needs.
“Money and wealth management is a strategy that meets a plethora of basic needs – safety, self-worth, control, status, and in a relationship context – commitment, trust, superiority and many more.”
Financial management is a complex issue that is at the heart of having a strong relationship. Money is so essential in our lives, that it encompasses and goes beyond all the smaller issues that many couples argue over, such as a tidy home, or behaviour in certain situations.
The way couples see money and handle their finances crosses over so many aspects of life, that it’s impossible to separate money from everything else. If a couple wishes to function on a fundamental level, affording a house, or sustaining a particular lifestyle for themselves, they need to be on the same wavelength when it comes to money.
Communication and trust are integral to this, and we used our survey to ask couples how transparent they were about their spending habits.
Almost a quarter (23%) of all people in serious relationships admitted that they didn’t feel as if they spoke openly or regularly enough with their partners about their finances.
This suggested that a significant proportion of those in couples face something of a barrier, stopping them from properly working together to handle finances properly.
Laura Laidlaw, head of customer communications at Standard Life, stresses how important it is for couples to speak candidly about their finances.
“Conversations about money can be difficult. Some try to avoid the conversation, change the subject, or put it off until another time. But if you’re struggling with debt or need support, help is out there. As with anything in relationships, honesty is the best policy,” she says.
“So if you have a partner, start off on the right foot, by being completely open about money with your other half. It’s likely you’ll both have had your highs and lows over the years, so telling each other about any debts as well as savings and assets will help you both to better manage your money together.”
Without communication about finances, couples could be at risk of even greater tension in their relationship, as different personalities clash over fundamental attitudes to money, sooner or later.
We decided to delve deeper into the subject of trust and spending habits for couples, where we found one statistic in particular that you might find interesting.
Almost half (48%) of those in a serious relationship admitted to spending money from a joint bank account to make purchases, without informing their partner.
At first glance, the figure might suggest a deep-rooted problem for many couples. Making secret expenditures without discussing beforehand with a partner could be another source of great tension for couples, and we’ve seen how women are often more inclined to save.
People making sudden purchases without clear communication with their partners beforehand could limit the amount of resources the couple has to afford things later on. Any debts they incur as a result can also pose a problem, especially if one partner is no longer around to be in a position to pay them back, putting those left behind in an awkward position.
Despite possible causes for concern, things might not be as negative as they seem – what the question about secret spending habits didn’t specify was exactly what kind of purchases were being made.
For all we know, people could be admitting to using money from their joint bank accounts to simply head out to the shops for a pint of milk, rather than an extravagant purchase like a new car, furniture or something greater.
This response could, in actual fact, speak to a certain level of trust people have in one another in relationships – couples pooling resources and spending as they wish on an individual level, without consultation, because they trust the judgement of one another enough not to have to monitor each and every bit of spending.
Tracy Crookes, a financial planner at wealth management company Quilter, says that in her work she often sees the fallout of a lack of communication between couples.
"As a financial planner, sadly, I often have to advise widows or widowers who, prior to their partner dying, had very little to do with the household finances,” she says. “Following their bereavement, the surviving partner not only has to deal with their loss, but also the mammoth task of getting their head round a raft of finances they may have not even known existed, which can leave them very vulnerable.
“The same problem can occur if a couple chooses to separate. Whether a couple has a joint account or not, it’s critical that they are transparent and collaborative when it comes to their finances. Doing so will help them better plan their expenditure and make sure that they both know their financial limits.”
Babies on board – worth the cost?
As couples settle down for the long term, one life step has the potential to change their lives forever – having children. Having a baby comes with a long list of financial costs, but when people plan to have a child, they don’t view them as just another number on a balance sheet.
Babies can bring immeasurable amounts of joy to new parents, something that you can’t place in monetary terms, and it’s something which you could argue outweighs any of those financial costs.
Even so, fewer babies have been born in more recent years, and this is often because couples wait a little bit longer than previous generations. Shayne and Bronwen buck this trend, having started a family in their early 20s, but more and more couples are waiting until their 30s to start this major life step.
There are often reports in the newspapers about how expensive it can be to raise a child, with figures suggesting it could cost as much as several hundreds of thousands of pounds, when accounting for ongoing costs such as childcare and education over a number of years.
Despite this, Brits continue to show a willingness to incur these costs, and from the earliest days of their newborn’s life, they even start to seek ways to actively invest in their child’s future – giving them a helping hand from the day they are born, by finding ways to provide a financial safety net for them as they grow up.
This suggests that new parents not only show a willingness to incur the obvious costs associated with having a child, making sure they receive adequate childcare and a decent education. But nearly half of the people we asked showed a willingness to go that extra mile, putting aside their own hard-earned money to make sure their children were financially secure in their own right.
Shayne and Bronwen’s financial arrangements are the perfect example of this trend among young couples, as they raise their young daughter, Eira. Here, the pair explain how they make savings on everyday spending for the things Eira needs on a daily basis, and what they do to provide some financial support for when she is older.
“In terms of child/childcare costs, our weekly costs haven't necessarily increased that much,” says Shayne. “For example, we use cloth nappies, so we don't buy nappies every week, and Bron breastfeeds, so we've never needed to buy formula.
“We both pay exactly half of Eira’s nursery fees each, but this goes into a separate tax-free childcare account, hosted by the government. We also both pay into a current account and savings account for Eira each month. Bron puts £50 into her savings ISA and I put £50 into a current account for her.”
Investing in the next generation – opening a bank account for your child
43% of people who had a child with their partner told us they had created a savings account since the birth of their child, which they made a point of contributing to on a regular basis.
It’s difficult to avoid the fact that the costs of having a child can seriously impact the lives of couples, no matter what their financial situations. We asked couples whether these costs had stopped them from getting the most out of newfound parenthood – 50% admitted the financial burden stopped them from fully enjoying this stage in their lives.
The finding suggests that parents wish they could just get on with being able to enjoy spending more time with their children, without having to worry about their financial situation, which is completely understandable.
One particularly encouraging thing that we discovered from our survey of couples across the UK was that having a child helped ensure that communication about finances was more of a top priority.
As couples move into ever more uncharted territory together by starting families of their own, the need to pool resources and talk seriously about how to better manage finances collectively becomes more important.
This suggests that those who struggle to communicate effectively together on this issue could learn much from how other couples see money, especially those a life step ahead of them, who are now starting families of their own.
Did you know?
29% of couples admitted putting more money into their joint bank account, since they started having children.
The figure rises to 47% of those aged 18-34, the prime age at which couples start to have babies.
Third-party data provided is based on information that is publicly available at the time of writing. NerdWallet does not accept, for any reason, responsibility for the content on third-party sites.
Data from the survey referenced in the article was sourced from market research carried out between 6 and 10 December 2019 among 2,002 UK adults via an online survey, commissioned by NerdWallet and carried out by independent market research agency Opinium. Opinium is a member of the Market Research Society (MRS) Company Partner Service, and strictly abides by the code of conduct required of it in its work.
This includes research design and data collection; communicating with correspondents; conducting fieldwork; analysis and data storage. The data sample of 2,002 UK adults is fully nationally representative, meaning it has been weighted according to ONS criteria, ensuring that the gender, age, social status, region and city of the respondents corresponded to the UK population as a whole, at the time the survey was conducted.
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John Ellmore is a director of NerdWallet UK and is a company spokesperson for consumer finance issues. John is committed to providing clear, accurate and transparent financial information. Read more