AIBU to expect my DH to pay into a pension for me whilst being a SAHM to his children?(41 Posts)
Good posts Xenia. I don't always agree with you but your advice here is spot on.
Good for you.
On financial protection (1) make sure you have copies of all his financial information, P60s, [pensions, account numbers.
(2) Put everything in joint names where you can such as the house and savings accounts.
(3) Both make a will
(4) Put his pension payments if he were to die retirement and any life insurance he has (and make sure he has some and it is high enough) into trust for you - costs nothing, forms from the providers, keeps that out of his estate so you get access more quickly etc
(5) Consider if worth him buying more NI contributions for you although I doubt worth it and better you put spare money into your retraining and future earnings
I don't know your son's disability but you might also like to ensure your wills deal with the fact he may need more money/care than his siblings will.
I don't think paying into a pension for you is going to be better as he will get tax relief on contributions to his and you share in it (check its terms) and contributions to one for you won't so a contribution to his might be worth 40% more than it woudl be to yours. Anyway the Govermnent keeps changing pensions rules and in effect stealing money from them. They are likely to continue doing this for 30 years so might be better investing in careers anyway.
I don't disagree about the sexism Xenia but that was society's doing, not my DH and mine alone.
But it is an awful lot more complicated than that.
I grew up in a rough part of east london with socialist parents and spent my education hiding from bullying and severe harm whilst being expected to stand my ground but without using violence and be proud of my ragged victim-labeled coat (I could fight for sure but was more scared of my dad if he found out, than puting up with regular abuse).
Freeing myself of my father's grip, finding independence and finally, finally earning enough money to put myself through the education system again meant I started my career very late and could not compete with new graduates for the decent graduate opportunities.
When I met my DH I had only just begun the career I was capable of, but we were both getting on a bit for childbearing. I kept my skills up and negotiated hard with my company wrt taking a career break in order to secure a return.
Whilst I was on maternity leave with my second the company I worked for fell apart and merged and merged again and they no have no recollection of me.
I have been accepted on a signifiant post grad course to retrain shortly in a career that will be compatable with continuing to meet the needs of my disabled child myself. I have learned bitterly that no-one else can do this as no-one has the sheer determination and drive I have for his future, - but I cannot do everything.
It's all about a mixture of luck and other things. However sexism often plays a part.
Why is the mother at home as ever with the disabled child? Why isn't she off to work each day working her way up somewhere whilst her husband stays home with the 3? How did they decide it would be that way round? That is what is so fasciating or is it simply that women virtually always marry older men or men who earn more or men who expect women to stay at home or men who won't stay at home eveni f they earn less than their wives? Also the childcare costs if 50% to each parent and if by working at a slight loss for a year or two that means the woman or man then can earn a huge lot for the next 20 years that years of sacrifice can sometimes be worth it.
Thanks everyone. Xenia I can't work full tme and afford the kind of childcare and support my disabled child requires.
I hate to say this because I absolutely don't agree with your politics, but actually I am quite like you. I am determined and ambitious for myself and my family and a real 'can do' person. But I didn't have your leg up, and I don't have your resources.
By all means give me some if you like.
The wiser advice is work full time. I have with 5 children
Xenia - I agree financial independence is better. However, OP has one disabled child. If that child is severely disabled and needs 24 hour care it is not always possible to work or work full time. Not every severely disabled child can be settled with a carer and even if they can it may not be best for them or may suck up so much of the family's earnings, even with disablement benefit, that the mother is left with peanuts.
It's a bit unfair for people to say the husband here does not understand pensions rules. It's the other way round. As said above a sum so sm all it's not worth paying in would get her tax relief but if the husband pays into his he could get tax relief tat 40% or even more on his contributions so it would be ridiculous to pay into a pension for a wife without tax relief when he gets in effect 40% more put into his than he woudl if he wasted her money on hers.
In addition if he dies she gets his anyway or some of it and finally on divorce a pension sharing order can divide pensions between them including his so she has a share of it in that sense.
The wiser advice is work full time. I have with 5 children. It tends to make most financial sense and often be best for chidlren too and then you can make your own pension provision.
It sounds like you need a review of your financial arrangements - what does his pension provide for a spouse in event of his death, life assurance etc.
I pay equally into my partner's long term savings as she is a SAHM and make sure she always has a surplus of 'running away' money as we both believe it's important for adults to have independent money and financial freedom.
You need to check out your husband's pension scheme rules to find out what the death in service benefits and widow's pension would be if you remain married. I'm not a financial advisor but private pension funds invest in equites and I would suggest investing in your home would spread the risks. Property hasn't done very well in recent years but over the long term it's one of the safest investments. If the pension fund doesn't do particularly well you can downsize from a family home and release equity to purchase an annuity and there is no capital gains to pay on your main private residence so it's tax efficient too.
What happens when you divorce depends on where you live. In England & Wales the value of all the assets, including pensions, held jointly and solely at the time of the financial settlement form the matrimonial pot to share. As time passes it matters less where assets originated from and unless the pension fund accrued before marriage was particularly big it would be included in the pot to share. Scotland is different and pensions are apportioned according to the number of years contributions were paid into the fund during the marriage.
and if one of you died pension would generally be 50% (or some share) - ISA's would stay 100% as a marital asset. though there are tax disadvantages early on.
You should as others have said look into the rules of his scheme. After a certain age the option is there in some pension schemes to make additional contributions which the employer matches. This might be a lot more financially beneficial than starting a private scheme of your own. But this would depend upon you staying together although you will still be entitled to some share if you split up. Who said pensions were complicated!!
>>What if we didn't separate but he died at 62? Would I get any of his pension then? <<
My pension would make provision for dependents, were I to die, so I would presume his would too. But he should check this and make sure you are named.
What he paid into his pension prior to marriage to you is irrelevant. You aren't entitled to it and I assume you aren't saying that you want a pension pot equivalent to his anyway.
If you were to divorce you would not only be entitled to a share of his pension built up whilst you were together but the courts can now instruct the pension company to physically divide the pot to give you some so that you aren't reliant on him paying you. If he dies at 62 whilst still married to you what happens to his pension would entirely depend on the rules of his scheme.
As natasha says - if his employers are contributing it makes no sense to reduce his pension contribution in favour of yours and it may be that he is nervous putting money when you have only fairly recently been struggling into a pension that will then get locked away with no access for any reason until you retire.
Maybe a compromise solution would be to make a regular payment into an ISA in your name by monthly direct debit. Technically its marital assets (as are all the things in his name unless he pre-owned them), but practically its you that controls them, they would be accessible in an emergency and although no tax advantage on the way in - tax free on the way out.
(Bitter experince of pension/savings issues in own parents divorce!)
Definitely not unreasonable that your savings/pensions should protect you both equally, pensions may not be the best way. Do get your state pension forecast, it's much easier to phone than do it online. I can't link as I am on a phone. You really need cash savings to cover a few months worth of outgoings split between each of you before investing in a pension.
Thanks all btw. I appreciate the help with this.
Tbh our savings are only a house deposit and we're currently looking as said savings are diminishing due to extortionate rent.
They're probably not going to exist post house purchase.
From what you have said I think that a pension for you would not be the most sensible option due to the amount you would need to put away to get a decent return.
I think your concerns are reasonable but with 3 small children I would not prioritise the pension over, for example, trying to buy a property. It is all investment in the future.
Tbh, we had planned to have two children close together, with me returning to work after second maternity leave.
We were NOT planning to have a disabled child, a requirement to sell our house and move frequently to get him adequate provision (a full-time role also) and then a third child.
So, we hadn't considered much, just got on with surviving. But now it is clear I am in a financially vulnerable situation that I didn't expect to be in.
'Were you to separate, I do think you would be entitled to half of his pension for the years you were together, if you are married, so it is a mistaken assumption on his part that the pension is all his anyway.'
What if we didn't separate but he died at 62? Would I get any of his pension then?
>>Summer. The cost of childcare for 3 young kids, 1 disabled, is beyond my earning capacity. Beyond his for that matter. <<
Ah okay, my apologies. I assumed from your post that this was a discussion pre-first born, but it sounds like this is the existing arrangement and you are starting to get worried that all the saving for the future is in his name, and you have no financial provision?
Which is a reasonable concern.
>>I haven't had the opportunity to earn and put a substantial amount away to make up for it<<
I think this is the point. Sounds like you have been keeping house and home together whilst he has been earning and providing. Were you to separate, I do think you would be entitled to half of his pension for the years you were together, if you are married, so it is a mistaken assumption on his part that the pension is all his anyway.
As for him not being penalised, you are being penalised for having looked after your children. Does he not get that?
Good point about child benefit protecting your NI contributions, you can check on line to get a forecast for your state pension and if you need to 'buy' any missing contributions.
I really don't think from what you have said that putting a few pounds away in a pension scheme will make a lot of difference, far more important to try to buy a house in joint names and perhaps look at life assurance?
I worked for many years before choosing to give up; I contributed fairly hefty sums to my personal pension which is now frozen
but worth hardly anything.
Claiming Child benefit ensures you don't miss out on NI contributions to qualify for your State Pension. If you can afford to save a pension probably isn't the best option in your case. I'd get advice about who's name the savings and assets are in- there could be tax benefits to them being in your name.
I had hardly any before, but my point is I haven't had the opportunity to earn and put a substantial amount away to make up for it.
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