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Assets and debts in couples
Karen Rowlingson, Professor of Social [email protected] of Centre on Household Assets and Savings Management (www.chasm.bham.ac.uk)
Assets and debts in couples
Exploring how couples share and make decisions about assets and debts
In-depth interviews with 80 people in 40 working-age couples
Cross-section of people from different occupational groups and family types
Interviewed at same time in different rooms by different interviewers
Funded by Friends Provident Foundation Joint work with Ricky Joseph
Two key questions
Do couples share assets and debts equally?
Do couples make joint decisions about assets and debts?
Do couples share assets and debts equally?
A distinction needs to be made between formal legal ownership and perceptions of ownership
Formal and perceived ownership
We’ve bought some shares in [a bank]
Interviewer: Whose name are the shares in?
I don’t actually know that [laughs]. .. I think they probably are [all in her name] to be honest … [so] I suppose [I don’t own any shares], not really if they were in her name.’
Do couples share assets and debts equally?
Women seemed to have greater housing assets than their partners in subsequent relationships
Future pension income seen jointly but pensions were individually owned, no pension sharing orders
Individual pension pots but future income seen as joint
‘She's said … her pension will be our pension which is nice of her’.
Married couple in 30s, no children, teacher and manufacturing worker
Do couples share assets and debts equally?
Women were more likely to report problem debts
Assets were shared most equally in first cohabiting and married couple relationships and where resources were similar
Re-partnered couple: cohabiting with great difference in relative resources
‘It makes things simpler if I know that I'm responsible for the mortgage. We haven’t thought about his rights if we were to separate and we don't talk about separating particularly. So it's just easier for me to be in control of it.’
Subsequent cohabitation (5 years), 40s, B/C2
Do people make joint decisions about assets and debts?
Broad typology of decision-making– Joint and equal (5)– Joint but with one partner taking the lead (20)– Independent (11)– No decision-making (4)
Socio-economic status and relative resources important here
Marital status also important here
One partner in the lead (1)Married couple in 40s/50s with children, C1s
In deciding about their mortgage, for example:
‘I think he did all the shopping around and then we sat down and agreed to what we wanted and went ahead with that one’.
She said she was happy to ‘pass it on to him and let him deal with it’ because: ‘he does like to go into detail so I leave him to do it and get on with my other things. I don't want that responsibility.’
One partner in the lead (2)Married couple in 40s/50s with children, C1s
A similar process occurred with decisions about buying and selling stocks and shares within this couple:
‘Yes, he discusses it with me and then I go along with him thinking it can't do any harm at the time.’
And in relation to pensions:
‘Yeah, we would decide ... he would tell me about it and then he'll say, yes, we've made a decision.’
One partner in the lead (3) Married couple with children, 30s, both C1
[He] probably won't have much of a clue on where his money is because I tend to deal with most of it.
And she was right!
Policy implications
Relative treatment of cohabiting versus married couples in relation to assets and debts
Capital means tests in social security system Transparency or privacy in relationships? Financial education and capability initiatives
should not be solely focused on individuals