Women in couples are forced to control of partnership finances because men are unwilling to take on the responsibility.
British government research points at women as the ‘alpha’ partners where money is concerned out of necessity and even when they are less confident or knowledgeable about handling the family’s money.
After interviewing thousands of couples, researchers identified three decision making patterns for couples:
- Unbalanced Responsibility – Where mainly women have more financial control than their partners and often rein in spending by the other partner. Most couples in this group are aged 20 to 30 years old
- Cautious and Content – mainly older couple who own their home outright. These couples are careful with their spending and run a strict budget
- Organised Aspirational – These are couples comfortable with managing their money, but still split in to an alpha and beta partnership – although the alpha was more of a researcher than a decision maker
The report – compiled by the Department of Work and Pensions – discovered couples find managing household finances a chore, but recognise the need to organise spending with a budget.
Little discussion about money
Financial decisions, the findings showed, were often reaction to life events like marriage, having children or receiving inheritances rather than planning to save or invest.
“Financial decision making showed little evidence of joint planning or interaction,” said the report.
“Even though couples described their decisions as collaborative, their description of how they made their decisions indicated that discussion only took place when a conclusion had already been made.”
The report is part of ongoing government research looking at pensions and retirement savings.
Couples often told researchers that retirement saving was an individual rather than a joint asset, which often led to lack of ownership over decisions by one of the couple.
“Even couples approaching retirement discussed pensions and savings very little, and few were active in making decisions about their retirement,” said the report.
Finances too complicated
The problems identified by the report centred on couples not seeing an immediate benefit of saving for retirement. Instead, families tend to focus on short-term needs, especially if they have little or no disposable income to set aside.
The findings also showed many families did not understand how many financial products worked.
Steve Webb, Minister for Pensions, said: “Pensions can seem unfamiliar and perplexing or something to think about when you’re much older. That’s why we are taking the hassle out of retirement planning by introducing automatic enrolment which will see millions starting to save or saving more for their retirement.
“This study backs up our research that individuals who are enrolled into a pension by their employer tend to stay in.”
