From paying bills to debt, the best way to start difficult conversations about money
Here are some expert suggestions to tackle tricky money topics
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Your support makes all the difference.At times it may feel easier simply to put financial conversations off – but Talk Money Week is encouraging people to open up about money.
If you’re unsure how to start, a good place to kick off financial discussions can be in your closest relationships.
Kindar Brown, a senior financial planner at Rathbones Group suggests scheduling “financial dates”.
Brown says: “Most of us will be used to having strategy planning sessions at work but few people build this approach into their personal lives. However, taking a step back to think about what you are trying to achieve together can be time well spent.”
It may be that one of you finds it easier to deal with household finances and bills than the other – but Brown cautions: “This can leave the other person quite vulnerable without even realising.
“For example, if the main bill payer or ‘finance controller’ became seriously ill or passes away, or if the relationship were to break down, would the other partner know how to access their finances or how to pay the bills?
“Having regular, open conversations about your finances, including who your suppliers are and how you access your accounts, are crucial so you’re prepared if the worst were to happen.
“Equally, maintaining some level of financial independence is also wise so you are not fully reliant on your partner.”
Debts can be something people feel uncomfortable talking about, but for some people it could bring a sense of relief.
Mamta Shanbhag, Tesco Bank’s borrow director says: “It can feel easier to try and deal with challenges around money on your own, but being honest with your loved ones and your partner, in most cases, is the best policy.
“We know that nearly two-thirds (62%) of adults don’t talk to friends and family about debt, and only 26% would turn to their partner for support if they found themselves in debt.
“You don’t need to deal with these things on your own, and if you don’t feel comfortable speaking to a loved one, then there are lots of charities that can offer support.”
People often feel under social pressures to spend, but Shanbhag says that this is another area where being vocal can help, adding: “You’ll often find people are in the same boat as you and will be grateful that someone has spoken up.”
Another subject people often put off discussing is pensions – which are often perceived as complex.
Chris Blackwood, spokesperson for the Pension Attention campaign, says: “The main thing to know is that feeling stressed or anxious is valid, but thinking about it, and planning and managing that anxiety moving forward can really help.”
Millions of people have been automatically placed into pensions by their employer. Blackwood cautions that while millions of people are benefiting from auto-enrolment, the actual amount they are saving might not be enough to fund the lifestyle they might expect when they retire.
He says it’s a good idea to chat with loved ones about the sort of retirement you expect and how much that might cost.
“If possible, it might be worth thinking about increasing your contributions if you can,” he adds.
“The earlier you can make additional contributions, the longer they grow, and it can really pay to increase the amount you pay into your pension during the early years.”
It’s also important to consider who you would want to pass your pension onto, in the event that you die before you can take it.
Blackwood says you can tell your provider through an “expression of wish” – either by logging onto the provider’s website or by asking your employer for help.
He adds: “Equally, if you’re divorced or separated it’s a good idea to send your provider an ‘expression of wish’ or nomination form telling them your preference.
“If you don’t do this it could mean that your ex-partner gets it.”
And, while monthly pay packets are often at the forefront of people’s minds, don’t forget to bring up pensions in a job interview.
Blackwood says: “The value of employer contributions should not be underestimated.
“Many employees are unaware of the ‘free money’ that employers contribute to their workplace pension and how significant the differences between an employer who pays the minimum and one who goes above and beyond will be.”
He says research suggests only around a fifth (22%) of people will ask about pensions before starting a new job, adding: “In fact, many employers reward their staff with higher contributions into the workplace pension than the legal minimums, so it is worth asking what sort of pension comes with the job – and how much they’ll pay into your pension on your behalf.
“Among all adults, one in seven (14%) regret not talking about their pension in their last job interview as they believe they could have negotiated more.”
Robert Cochran, a retirement expert at Scottish Widows, also emphasises the importance of talking to organisations about “lost” pension pots.
He says: “Over the course of a lifetime, individuals will likely hold many different jobs with various employers and will likely accrue several different pension pots. It’s all too easy to lose track of some of these, particularly if you are only at a job for a short period of time.
“If you have lost pots, the Pension Tracing Service is a great tool to help you track these down.”