Financial implications of losing a partner
There are of course also practical consequences if a partner dies.
In their new report, Losing a partner – the financial and practical consequences – Royal London examined the views of 500 people who had experienced a bereavement in the last five years.
They found that seven in ten people who lost a partner were unprepared for the loss in financial or practical terms.
Only 11% of those asked said they felt both financially and practically prepared when they lost a partner.
The research found that only two in five had made a will.
This is such a fundamental financial planning step that we are regularly surprised when we hear how few people have not put a valid will in place.[tweet_box]If you do nothing else to prepare for a loss of a partner, make sure you have both made a will[/tweet_box]
Three in ten of those surveyed in the research said they had discussed their wishes for a funeral with their partner.
Only a quarter had discuss the prospect of their partner dying, but very few of these had taken any practical steps or actions as a result.
More report findings
The report also found:
-One in five (22%) of those recently bereaved said the financial impact of lower income was the most difficult to deal with;
-Around one in six (18%) said they did not know what to do about the funeral; and
-Around one in six (16%) also found it challenging to look after the house following the death of their partner; a third (34%) said it was difficult to cook and nearly four in ten (37%) struggled with the washing and ironing.
According to Claire Henry, Chief Executive at The National Council for Palliative Care and the Dying Matters coalition:
“We shouldn’t be afraid to talk about death, but this report makes clear that putting clear financial plans in place is essential as well.
“Having the ‘big conversation’ is an important first step to getting our plans in place, but it’s only a first step.
“We never really stop grieving for someone we loved who has died, but that doesn’t mean we should have to suffer the financial consequences for years as well.
“Financial and practical planning is as important as thinking about the care we want to receive, making a will, lasting power of attorney, or our funeral plans.
“Talking about death won’t make it happen, and getting our plans in place enables us to get on with living.”
How to prepare for the loss of a partner
To help prepare financially and practically for the death of a partner, Royal London suggest starting a conversation to find out:
Where does your partner keep all their key financial information?
Is it online, or in a file at home? Agree a shared place for all information, from mortgages to bank accounts, and consider putting bills and accounts in both partners’ names.
The list of tasks you each carry out
Ask your partner the question “if I died could you…” organise the car maintenance, carry out household chores or pay the utility bills?
Does your partner have a will?
If so, is it up to date to reflect changing circumstances? Where is it kept? If you have one, does your partner know where to find it?
Does your partner have any insurance policies or a funeral plan in place?
What are you and your partner insured for and will this be enough? Where might you want to consider further cover?
Here at Informed Choice, we are able to model the financial consequences of the loss of a partner by building ‘disaster scenarios’ into the lifetime cash flow forecasts we create for our clients.
This modelling of disaster scenarios is a very effective way to graphically illustrate how the death of a partner would impact household finances in the future.
Whilst talking about death is never easy, it is very important and raising the subject as part of the creation of a Financial Plan can make it easier.