Couples with a significant age gap may encounter financial difficulties during retirement, according to financial services firm AJ Bell. Office for National Statistics (ONS) data indicates that approximately three in 10 married couples and a third of cohabiting couples have an age gap of five years or more.
Sarah Coles, head of personal finance at AJ Bell, noted that issues can arise if one partner retires earlier or requires care. Key areas for couples to address include budgeting for the first retirement, factoring in potential care costs, and planning for the death of a partner.
The state pension age is set to rise from 66 to 67 between April 2026 and April 2028, which can affect retirement planning for couples with age differences. For instance, a younger partner may need to shoulder more household costs if the older partner retires first, or if one partner scales back working hours.
Care costs can be substantial, with home care potentially costing at least £34 per hour. If an older partner moves into a care home, their savings and investments, including half of any jointly held assets, will be assessed against the upper capital limit of £23,250 for state support. Coles advises considering how assets are held to prepare for this potential future.
Couples should also have wills in place and understand spousal benefits from pensions. For those with defined contribution pensions, the choice between a single life or joint life annuity can be crucial, especially if one pension is heavily relied upon.