We take a look at the best route to adding a partners income into an overall couples plan as simply as possible.
Being able to plan as a couple is our most requested feature. We are building this now and it will be ready shortly. There are many ways to do this, but set out below is the first version of how we expect to do this.
1. Build you own plan first
Some people will only want a single plan. Others will have already built their own plan. We plan to keep this as it is within our main journey, i.e. building a plan for yourself.
Then once this is saved, for registered users, you can add your partners income in our Dashboard Area in the Partners page in you want to.
2. We need to check a few things first
We need to check the income you want. As you probably have used a single income previously we need to convert this to a suitable couples income. We will check if you want us to convert it to an equivalent level for a couple. Its not simply doubled as there are shared costs, so it is more like 40-50% extra that is needed as a couple.
We will check this and update it to a new suggested sensible figure. You can always change this if wanted.
3. Get some info on your partner
We won’t need all the info on your partner that we needed when you built your own plan. All we need to know is:
- Have they started taking a retirement income yet, if over 55?
- If not, when do they expect to start from (earliest will be your own start date)?
- What you partner has to put towards their income, just like in our Haves page currently for you?
- Did they take, or do they want to take a tax free cash lump sum at retirement from any pension pots they have?
4. Work out the income your partner can get without shortfalls
To make things as tax efficient as possible we will start by seeing if they can get the tax free allowance (currently around £12,000) increasing at 2.5% a year using what they have. If they can, we will increase this by £1,000 until it is no longer possible and save the last figure possible.
That will be their after tax income we add to your plan.
5. Add it to the overall couples plan
Lets say your partner could get an after tax income of £18,000 using everything they have without any shortfalls. We will then let you bring this amount into your Other Income. It will be called Partner’s Income.
You now have a couples plan to get the total after tax income needed as a household. This uses both your tax free allowances and everything you both have.
Some questions and answers…..
Q. What if my partner will be still working after I retire?
A. We will bring in their retirement income from the date they plan to retire.
Q. What about their State Pension?
A. Like your State Pension, we will assume they get the full amount, but (like yours) you can always update this if they can estimate their total number of National Insurance years by the time they reach State Pension Age.
Q. What about investment returns?
A. We will assume they will get the same return on their savings and pension pots as you have entered for your own plan.
Q. What if they retire before you?
A. We will build in their retirement income from when you plan to retire.
Q. What about different ages and life expectancies?
A. To keep things simple we will assume your partner is expected to live for the same period as yourself. This means the plan we build will provide a retirement income to last from when it starts to your own life expectancy in retirement.
What do you and your partners pension pot withdrawals look like?
Soon after this is available you will see two sets of pension pot withdrawals rather than one as currently in the Secure page. They may look like below….
Yours (like you see now in the Secure page)
Your Partners (which you will also see when ready)
This gives you the key answer for both you and your partner to the question i.e. …..
How much to take each year from your pension pots to get what you need as a couple without running out?
This assumes everything goes as expected. We all know it won’t, so its always good to keep tracking and refining your plan as time goes by.
Couples income within our new integrated product
When ready, you can use our couples modelling tools with your own pension provider or your own adviser. You don’t need to use our integrated product to access it.
Our integrated product is there though to make things simpler. We aim to allow both yourself and your partner to be able to put all your household pension pots in this solution if wanted.
This would mean all pension pot income paid automatically as per the couples plan on the same day of the month from one provider along with a tailored default investment strategy based on your the payments you are both taking.
In short as much as is currently possible will be done for you to make things easier and you can track and refine this over time much simply.
If you have any interest in this product let us know below if you haven’t already.
We are also always happy to answer any feedback, suggestions or questions you may have. Just email us at contact@guiide.co.uk if you do.
I like the sound of this, keep me informed……
Disclaimer
All of the above is intended for information only. Further details of the product will be provided in due course. Other pension products are available and if you are unsure on what type of product or investments could be right for you, we recommend that you seek regulated financial advice.
