Talk Money Week 2020: Covid-19 has changed the conversation

Britons are still keeping quiet, but there’s an opportunity to break the taboo.

• Chatting with friends about pensions should be right up there with property for acceptable dinner conversation topics, say’s ii’s Rebecca O’Connor
• Covid-19 presents an opportunity to break the taboo of talking about money through necessity, say’s ii’s Myron Jobson

It promises to be a Talk Money Week (9-13 November) like no other as the Covid-19 pandemic has changed the conversation. 

But despite the stock market crash, an uptick in redundancies and the spectre of youth employment owing to the pandemic, many Brits are still keeping schtum about their finances, according to research by interactive investor, the UK’s second largest direct-to-consumer investment platform.

The interactive investor Great British Retirement Survey 2020*, which was conducted during the months of full lockdown and involved a sample of over 12,000 UK adults, revealed that just under a third (32%) of those in a relationship talk about money with their partner only once a month, or less. This is unchanged from last year’s survey** results, even though Covid-19 has hit many peoples finances hard.

In addition, many couples still can’t talk to each other openly about money. Almost a fifth (18%) of respondents admitted to lying to their partner about money – up from 11% in the previous instalment.

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “Covid-19 presents an opportunity to break the taboo of talking about money through necessity. 

“Unfortunately, many couples have seen their world turned upside down when it comes to their finances during the pandemic. Some couples who have earned money separately for years may find themselves relying on their partner’s salary to keep them both financially afloat for the first time due to loss of income through reduced working hours or redundancy. 

“It is not an easy situation to digest as there is an obvious shift in the power dynamic, and the person who experienced a loss of income might feel they now need to be financially dependent on their partner. A difficult conversation is needed here to stop financial insecurities from snowballing into financial anxiety which can put a huge strain on relationships.”

How much do couples know about their partner’s finances?

The 2020 survey found that more women than men (70% vs 67%) know how much their partner earns, but men have a better idea of how much their partner has in savings and investments (80% versus 74% of women). However, just under half of male (49%) and female (47%) respondents do not know how much debt their partner has.

More than a quarter of couples have completely separate accounts (26%) and 19% only have a joint account, according to the survey. Most couples (56%) have a mixture of the two.

Becky O’Connor, Head of Pensions and Savings at interactive investor, says: “Between couples who share resources and live together, it’s hard to imagine anything you shouldn’t be able to talk about. 

“Talking about money is crucial – and retirement planning shouldn’t be left out of the conversation. Those approaching retirement, in particular, should have a clear idea on where they both stand financially if they want to make their retirement dreams become reality. Couples who don’t talk about finances can’t draw up a retirement plan that ensures they both live comfortably in retirement, and risk missing out on maximising pension tax relief available between them.

“Those who are contemplating buying an annuity should consider their partner and decide whether buying a joint annuity would work best in their situation. It is good to have your spouse on board with big financial decisions and make sure they understand the implications. And if in doubt, seek financial advice.”

Talk to friends about money

Becky O’Connor says: “Chatting with friends about pensions should be right up there with property for acceptable dinner conversation topics. Why should it be considered gauche to talk about your investments in a SIPP or ISA, but not local house prices? 

“There may be good reasons you don’t want to disclose the amount of savings you have, or the size of your pension pot to friends, but there are ways of talking about money that don’t involve giving sensitive details. Fund choices, for example, or your views on ethical or sustainable investing are lateral ways to talk about investing without using numbers.

“If as a society, we get used to talking informally about things like where is the best place to invest our pensions, or which funds or companies we have picked for an ISA, this change in culture might even help to promote sensible, long term financial decision-making and higher contributions to long-term savings.”

Talk to your children about money

Myron Jobson says: “Parents and carers have a crucial role to play in helping their children develop a healthy relationship with money by fostering positive attitudes towards budgeting and saving from an early age to help them make the right financial decisions in later life. 

“A great way to start the discussion is by focussing on basic concepts. For younger children, playing shop is a good way to help them understand how money is used day to day as well as introducing the concept of budgeting. 

“One of the most practical ways of teaching older children about the benefits of savings and investing is by putting theory into practice. A Junior Isa can be a great way for children to engage in a money pot that will ultimately be handed to them when they reach adulthood. They won’t be able to invest for themselves, but you could stoke their interest by including them in the conversation and investing in things they might be interesting in – Sony if they are a PlayStation advocate for example. Of course, it is important to remember that diversification is key when it comes to investments.”