Savings, investments, debts and psychological well-being in married and cohabiting couples

by Man-yee Kan Department of Sociology, University of Oxford

Abstract This paper builds on the existing literature about the distribution of financial resources within the household between couple members. Using data from the British Household Panel Study (BHPS) we examine the ownership of housing, savings, investments and debts by couple members, and how these vary by individual and household characteristics. A particular focus is the extent to which financial resources derived from paid employment may be allocated within the household through the ownership of assets and debts by couple members. We then examine the relationship between the ownership of assets and liabilities with individual psychological well-being. The analysis finds that most couples who own their own home do so in joint names even though cohabiting couples are significantly less likely to have joint home ownership compared with married couples. Savings are more commonly held in joint names than investments or debts and there is evidence of an increasing independence in financial arrangements between couple members through the period 1995 to 2005. Cohabitation reduces the likelihood of shared financial arrangements. Both partners labour market income affects the likelihood of having any savings or investments for both men and women but as mens labour income increases, the likelihood of men having jointly held savings and investments with their female partner reduces. Psychological well-being is improved where individuals have any savings or investments either solely or jointly held with their partner. Womens well-being is improved where they have jointly held investments with their partner while men suffer worse well-being if they have debts.