A little more than 300,000 married and de facto couples admit to having secret bank accounts without the knowledge of their partner.
Research conducted for TAL Life Insurance by Galaxy Research found that while 66% of couples have joint bank accounts, a large percentage also have their own independent finances with many having secret stashes.
A total of 45% of married/de facto people have a bank account to which their partner has no access (36% married but 71% of de facto couples) and 3% have accounts that their partners are not even aware of.
While the average amount held in these secret accounts is $30,000 - $37,700 for males and $22,300 for females – 11% have more than $100,000, 13% contain between $50,000 and $99,999, one in four have $50,000, and for 39% the amount is less than $5,000.
TAL Group CEO Jim Minto said he was surprised so many people had accounts to which their partner either had no access or were not aware of, with one out of five people saying they maintained these covert accounts as a safety-net in case something happened.
“While we may not know the precise motivation behind all these secret bank accounts, such accounts are no substitute for proper financial protection in the event one’s income suddenly stopped for good or for an extended period as a result of illness,” Mr Minto said.
He said that often couples may not have shared financial goals and there is a good reason for maintaining separate accounts.
“But for life insurance planning a shared approach can make a lot of sense when there are joint debts such as mortgages and other shared responsibilities such as children. Ensuring the family has the right amount of cover is very important, and a financial adviser is a great place to start.”
Other key findings of the research
- Baby boomers are more likely to be keeping their secret stash in case something happens – 30% report this as being the main reason compared with 15% of other age groups.
- While the average balance of a secret account is $30,000, Aussies are stashing $18,400 in accounts their partners do not have access to but know about. Men averaged a balance of $21,100 in these accounts versus $16,600 for women.
- Of the separate but known accounts, 8% or the equivalent of 303,000 people have more than $100,000.
“We really encourage people to research and consider their risks and protection needs. For example a professional financial adviser can help a couple come to an agreed view about how they can best plan financially for the unexpected,” Mr Minto said.