Kleinwort Hambros surveyed over 1300 individuals who are married, in a relationship or have a civil partnership, to discuss divorce protection plans and financial issues surrounding couples.

A survey of UK adults suggests that more than a quarter (27 per cent) of those in a relationship don't have any financial protection to cover themselves in case their relationship ends and just over a third (37 per cent) said they were unsure if they have any financial protection.

Wealth manager Kleinwort Hambros surveyed over 1,300 individuals who are married, in a relationship or have a civil partnership, to discuss divorce protection plans and financial issues surrounding couples. This publication asked the firm about the amount of wealth the respondents had, but it could not give a figure. If the survey results were reflected nationally, it means 8.7 million adults don't have financial shelter in place if things go wrong.

Older adults are more likely to have some form of protection, the report said. Half of the younger respondents (18-24) said that they had no form of protection, with only a quarter (26 per cent) of those aged 55 and older admitting to this.

Regarding the adults who have protected their household and personal finances, the most common way they have done this is through marriage law (35 per cent), with an informal verbal agreement with their partner (13 per cent) the second most common.

While an uncomfortable subject to address, the risk of breakups is an issue that wealth managers and lawyers have regularly raised in these pages, pointing out developments around topics such as recognition of pre-nups, debates about how assets are divided, use and misuse of offshore structures to hold wealth, and other complications. With divorce payouts sometimes running into millions of pounds, the subject is a wealth management focus area in its own right.

Understanding a partner’s finances  
When questioned about the level of understanding couples have regarding one another’s finances, nine in ten (90 per cent) admit to having at least some form of understanding of how much their partner earns, with over two thirds (68 per cent) having full understanding.

When looking at the areas of their partner’s income, which adults have the greatest understanding of, main salary is the most well-known (74 per cent), followed by over a third (37 per cent) knowing how much their partner withdraws from their pension and a quarter (26 per cent) knowing how much their partner withdraws from their savings.

Despite strong knowledge about partner earnings, 24 per cent of adults in a relationship currently do not hold any financial products or joint accounts together. 

Over half (55 per cent) of those who do hold at least one financial product jointly with their partner, have a joint bank account, and just under half (46 per cent) currently hold physical wealth together, such as the value of household goods and the contents of their main home.

Relying on a partner’s income
The survey revealed that two fifths (39 per cent) of all adults in a relationship think that they will be reliant on their partner's income/wealth during retirement. 

This reliance on a partner’s wealth also increases with age, with only a fifth (19 per cent) of 18 to 24-year olds stating that they would be reliant on their partner's wealth during retirement; this increases to a third (32 per cent) of those aged 35 to 44, and again to just under half (48 per cent) of those aged 55 and above.

“Separating from a partner is always a life-changing situation and can be a very isolating experience,” said Paul Kearney, head of private banking at Kleinwort Hambros. “Yet when approached in the right way, the process provides an opportunity to take control, and give your life a new direction and focus. One of the most important issues to consider is the financial settlement, which involves navigating a complex set of decisions that will have serious implications for the future. It’s essential to seek support from a team of professional advisors who can help make informed choices.”