Joint planning could add £2 million to spouses’ pension pots

With Valentine’s Day approaching, new analysis from Rathbones reveals that spouses who plan their finances together - including coordinating pension contributions, tax planning and long-term financial goals - could be £2 million better off over 20 years.

The uplift comes from the combined power of pension tax relief and long-term investment growth and the additional contributions. When these are harnessed jointly rather than individually, the effect compounds dramatically.

Rathbones’ calculations show that a married couple or civil partners can build a combined pension pot of around £2.6 million over 20 years if one partner, an additional‑rate taxpayer, contributes the full £60,000 annual pension allowance* and also pays £20,000 into their partner’s pension each year.

This translates to net annual contributions of £33,000 for the additional‑rate taxpayer and £12,000 for their higher‑rate‑taxpayer partner once tax relief is included. Almost half of the uplift comes from pension tax relief, when reinvested and compounded over time [see table below].

By comparison, if only the additional‑rate taxpayer contributes £60,000 a year, the combined pot would be just under £2 million after 20 years. These figures assume the partner receiving contributions is a higher‑rate taxpayer, tax relief is reinvested, and investments grow at 5% a year.

If the additional‑rate taxpayer were to maximise both their own and their partner’s full £60,000 annual allowances, their combined pension could reach £4 million over 20 years - nearly £2 million more than in the lowest‑contribution scenario.

These scenarios focus solely on contributions made by the main earner and amounts paid into their partner’s pension, not any separate contributions the partner may make.

Ryan Jackson, Associate Financial Planning Director at Rathbones, says: “The phrase ‘better together’ couldn’t be truer when it comes to spouses and their finances. Our analysis shows that by simply making the most of the tax allowances and reliefs already available, spouses can build a genuinely lifechanging sum of money. 

“We know from experience that people can be hesitant when talking about money - even with their nearest and dearest - but when we show them the potential financial benefit in pounds and pence, the impact is undeniable. Even those who put only part of this approach into action can be significantly better off today and far into the future.

“Marriage itself is an incredibly effective financial planning tool, because it gives couples access to a range of tax allowances and reliefs that simply aren’t available to individuals.”

The benefits are evident even over shorter periods. After 10 years, an additional‑rate taxpayer contributing £60,000 to their own pension and the same amount to their higher‑rate‑taxpayer partner could accumulate around £1.5 million. This compares with £1 million if the partner receives a £20,000 top‑up, and £755,000 if only the additional‑rate earner contributes £60,000.

Better together: The steps spouses can take

Agree your goals together

Joint financial planning begins with clarity. That means discussing both short-term goals - such as building an emergency fund, saving for a home, or preparing for major life changes - and longer-term ambitions like moving up the property ladder, retiring comfortably, or planning your estate. Clear, shared goals help spouses prioritise and stay aligned.

Be open about money

Honesty about income, savings, debt levels and spending habits builds both financial and emotional trust. This transparency ensures the plan you create together is realistic and reduces the risk of surprises later on.

Maximise pension allowances as a team

Pensions remain among the most tax efficient ways to save for the future. Each partner has a £60,000 annual pension allowance. For additional rate taxpayers, this can deliver 45% tax relief, making pensions an extremely powerful wealth building tool. When both partners contribute, or when the main earner boosts the other’s pension, spouses unlock two sets of tax advantages - significantly improving long-term outcomes.

Use ISA allowances jointly

Each partner can contribute £20,000 a year to an ISA, giving spouses £40,000 of tax-free investing or saving potential annually. Coordinating ISA use shelters investment growth from tax and builds a flexible, efficient savings pot.

Reduce tax on investments with spousal transfers

For assets held outside pensions and ISAs, tax-free spousal transfers allow spouses to share capital gains and dividend income more effectively. This makes use of two sets of allowances and ensures growth is taxed at the lower partner’s marginal rate - a simple but often overlooked optimisation.

Plan ahead for inheritance

Spousal transfers are exempt from inheritance tax. With thoughtful planning - including use of the residence nil rate band - spouses may be able to pass on up to £1 million tax-free, ensuring more of their wealth goes to loved ones rather than the taxman.