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Becoming a SAHM and money worries

(5 Posts)
rubyblue Wed 24-Aug-11 13:37:48

Not sure if this is the right forum topic but we're just about to move for DH's new job and I'm giving up work. Tbh, am scared shitless about giving up my income, pension, status and financial independence - at least until I find another job. We've always had fairly separate finances - joint account for household and kids stuff into which we both pay each month but otherwise, our salaries are our own. After much ahem 'discussion' with DH, he has finally agreed that we need to share his income so that it's our own, rather than him giving me a handout each month, which made me feel like some 1950s housewife. But what about pension provision? What do SAHMs do about that if you're off for a while? I'm really careful about this stuff having seen my Mum struggle and be financially naive, especially about pensions. Any thoughts? How do you manage your finances?

Huia Wed 24-Aug-11 18:10:00

You might like to try posting in the Money Matters forum.

The pension issue is something that I have thought about because my grandmother had a similar experience to your mum. When my grandad left her she was about 45. Because she had no work experience outside the home (he hadn't allowed her to work) she had to support herself with minimum wage jobs, and in those days she had no legal entitlement to his pension at all (which would have been a lot).

A few years ago my DH gave up work to go back to full-time study, and we plan for him to be a SAHD (hopefully in the near future). However, I don't live in the UK so my experience is probably not quite so helpful to you.

We have always had joint accounts so that side of things hasn't been an issue. I have an employer-subsidised retirement savings scheme, and where I live he would have a claim to part of that if we split up/if I died. Also, where we live the state pension is not tied to earnings during your working life, so that is not an issue for him.

I guess one question is whether you would have any claim to your DH's pension if you split up (or if he died and you had no provision made for you in his will). Also, is your state pension affected if you are not working? If so can you make voluntary top-ups?

minipie Wed 24-Aug-11 18:26:35

Is your pension a personal stakeholder pension ie run by a separate company?

If so, it is independent of your job, it is personal to you, so you can keep paying into it even after you leave.

I have agreed with my DH that if I stop working at any point, we will continue to pay into my pension, using DH's salary. This makes financial sense for us as a couple (ie assuming we stay together) due to the tax benefits of pensions, but of course it also protects me in case (god forbid) we don't.

rubyblue Wed 24-Aug-11 19:41:38

Hi, thanks for the advice. My pension is a final salary - it's a brilliant scheme, employer pays something like 13% and I pay 6 or 7% so I'm gutted to leave this. But, can't plan our lives around my pension! I wonder if I should look into continuing with national insurance? Maybe I should look at benefits. Guess we wouldn't qualify. The only alternative is for us to divert some money into my ISA but somehow this doesn't seem as safe for the future as a pension i.e. you can get at it!

minipie Thu 25-Aug-11 11:07:45

Hmmm it's worth double checking with your employer whether the pension is portable, i.e. can you keep contributing after you leave (Obviously you'll only be able to discuss this once you have told them you are leaving!!)

If not, then ISAs in your name are another good option definitely. Even leaving aside the issue of "protection" for you, it makes sense for tax reasons to use both partners' ISA allowance, if you can afford to save that much. Although as you say it isn't locked away in quite the same way!

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