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A little more conversation - time to tackle the taboo and talk money

Along with sex, politics and religion, money is one of the subjects we frequently avoid in conversation. As far as money is concerned, especially among family, it is time to break the taboo. And what better time to do so than during national Talk Money, Talk Pensions Week, starting today.

Rob YuilleThis is a significant taboo to break. According to one survey by Lloyds Banking Group, half of UK adults believe that talking about personal money matters is taboo – more difficult than talking about sex or religion. And when we do, 25% admit to not telling our family and friends the full truth. The consequence of our national reluctance to talk money matters, is that we under-save, and we are not as financially resilient as we could be.

Talking about money can also help address wider social issues, like wealth disparities between men and women. Insuring Women’s Futures, which launches its manifesto tomorrow, found that women aged 65 have an average pension pot that is 1/5th the size of a male counterpart. We know very little about how couples share their money, but the first step is for them to talk about it.

So here are three conversations that every UK household should grit their teeth and have during this week:

1.Talk pensions. Rising life expectancy means that securing a sufficient pension has never been more important. According to the Financial Conduct Authority, only one in eight pension pots will be worth £250,000 by retirement, while new Retirement Living Standards suggest a minimum income of £15,700 a year for a couple, up to £47,500 for a comfortable retirement. Our guide to tailored communications through the life course shows how providers already prompt consumers to consider different needs at different ages, but pensions dashboards will be a gamechanger in helping households plan around all their pensions and the State pension.

2. Talk sickness and injury. Over half – 52% – of workers are worried that they will have insufficient income to manage if they are off work for longer than a month due to illness or injury according to a survey by one insurer. One in six workers admit that they did not know what their employer’s sick pay policy was, and assume that their employer or the state will adequately support them – unfortunately this is not the case, with an obvious impact on their families. The ABI’s ‘Percy the Protection Calculator’ tool combines Government benefit data with consumers’ information to give quick access to an accurate estimation of likely monthly income if they are injured or become ill.

3. Talk later life. The next Government will need to tackle the challenge of funding social care, and private funding will be a part of any system. Yet consumer polling for the ABI found that 90% of over 65s have no plan for paying for care. We want to see a government-led awareness campaign to encourage people to plan ahead, with their partners and parents. And it’s not just care we need to talk about: it should become the norm that people have a power of attorney in place, and a named person to receive their pension and life insurance if they die.

Talking about these issues will lead many people to ask, what next? Money matters can be complex and no two people are the same. The answer is to seek expert help – the Money and Pensions Service, which is leading Talk Money Talk Pensions week, has a critical role in all of these issues, and in signposting people to advice. Industry and Government will need to get behind them to help them deliver.

Starting a conversation about your finances should not be an end in itself but a regular occurrence, because as lives change so do our financial needs. Breaking the talk money taboo can be the first step to a more financially contented life.

Last updated 18/11/2019