Generation Z couples are the most likely to have secret savings, often amounting to thousands of pounds, according to a study.
Almost one in five (18 per cent) of Gen Z partners, aged between 18 and 24, admitted they had investments or savings they have not told their partner about.
According to research from Investec Wealth & Investment, older couples were less likely to have such secret savings.
A relatively low one in twenty (4 per cent) of over 65s married or co-habiting couples were found to have investments or savings they had not told their partner about.
Advisers have pointed to existing taboos in society when it comes to talking about money.
Lisa Meller, IFA at Personal Finance Movement, said: “This shows the taboos we still see a lot in society, and in particular relationships, when it comes to talking about money.
“There appears to be an underlying desire particularly by those in Gen Z to protect their financial security, which is completely understandable especially in a cost of living crisis, as well as a safety net if things go wrong with their partner, which is actually something that can often be addressed by setting up a prenup.
“This not only helps to protect each party but also presents an opportunity to talk through each person's concerns, worries and goals and can therefore assist in aligning these early on.”
Considerable amounts
On average, 7 per cent of all married or cohabiting couples in the UK admitted to having secret savings, and the amounts were not small, at an average of £72,800.
A quarter (25 per cent) said they had hidden away up to £5,000 and about a fifth said their secret stash was worth between £10,000 and £25,000.
Meller said: “When I work with couples I will usually make a point to not only have a joint session with them but also separate sessions which each person, which I find enables each person to express their own financial planning goals freely that they sometimes have not yet discussed with their partners.
“This greatly assists in creating a forward thinking financial plan for couples taking into account all their assets.”
However, quite a few advisers said they weren’t surprised by the figures.
Tom Kean, director at Thameside Financial Planning, said: “I’m surprised it’s not more people; lots of people I talk to have some kind of worry in this regard.
“I’m also wondering what it is about Gen Z that makes them most likely to snaffle-away their hard-earned. Perhaps it’s the time of most volatility in someone’s life with new jobs and young families making them feel more insecure about relationships.”
Kean said there was a difference between someone having their own cash to do with as they see fit, and secretive behaviour.
“I’ve had clients (and enquiries from potential new clients) over the years, reveal hidden money in the millions,” he said.
“It puts us in a tricky position of course, and I personally find it quite sad.”
Likewise, Tim Morris, IFA at Russell & Co Financial Advisers, said the one in five figure did not surprise him.
“I don’t think that’s changed much over the years, other than historically, men were the main perpetrators. It appears the numbers are evening up as the wealth disparity dissipates.
“The average amount of £72.8k surprises me. It would be good to know how skewed the mean is by some of the larger sums that are being concealed.”
Enabling better planning
Investec is urging couples to be more open about their finances to enable better informed financial planning and also to avoid nasty surprises when one partner dies, or the couple splits up.
The main motivation for not coming clean about hidden money was a concern their partner may spend it (31 per cent) - and women (33 per cent) were slightly more worried about that than men (29 per cent).
This was followed by worries they may split up or get divorced, with around a fifth (21 per cent) stating this as a motivation for their secret stash – rising to a third of men (33per cent) compared to just 8 per cent of women.
Table showing the top motivations (overall, men and women) for keeping secret savings:
Overall | Men | Women | |
1 | Worries that my partner may spend it (31%) | We may split up / get divorced (33%) | Worries that my partner may spend it (33%) |
2 | We may split up / get divorced (21%) | Worries that my partner may spend it (29%) | May decide to give up my job or not work (21%) |
3 | May decide to give up my job or not work (21%) | May decide to give up my job or not work (21%) | We may split up / get divorced (8%) |
4 | Left by a loved one and I don’t want my partner to have access to it (15%) | Left by a loved one and I don’t want my partner to have access to it (21%) | Left by a loved one and I don’t want my partner to have access to it (8%) |
5 | Left by a loved one who requested my partner didn’t know about it (10%) | Left by a loved one who requested my partner didn’t know about it (13%) | Left by a loved one who requested my partner didn’t know about it (8%) |
Faye Church, chartered senior financial planner at Investec Wealth & Investment, said: “There is no right way or wrong way for couples to arrange their finances but it is surprising that so many are keeping substantial assets hidden from their partners and this appears to be more the case among younger generations.
“A secret savings account may be a nice surprise when it comes to a major purchase but with average wealth of around £72,800 being concealed there are financial planning issues to consider.
“Planning for retirement as a couple will be much more efficient if both parties know how much they have saved and how much they might need to save. Of course, financial independence is important and particularly for women, but it can lead to problems if both partners are not aware of their overall financial position.”
The research, which interviewed 1,067 UK adults, also found that around a fifth (21 per cent) were keeping secret savings as they may decide to give up their job or not work.
Morris added: “It makes sense that older and married couples feel more comfortable sharing. After all, if they conceal too much from their spouse, they could literally pay the price in the long run.
“Yet conversely, men are more likely to conceal it for that reason. That could be for any number of reasons - for which this story is not the place to speculate.”
Elsewhere, Justin King, chartered financial planner at MFP Wealth Management, said: “I do see this occasionally amongst my 'boomer' clients.
“It's often driven by a sense of security and the ability to spend your own money more freely, without criticism or judgement.”
sonia.rach@ft.com
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