Mumsnet, make this fair

[BittenInLondon]

I have read many threads in here about women becoming SAHMs and getting royally shafted in the process (not in a good way).
I will be shortly giving up my job to look after our DCs because childcare costs far exceed my income and I have almost no career progression anyway and, honestly, I want to spend time with the DCs while they’re babies. So do plan to start my own business once the DCs are in school, but in the meantime, does this sound like a fair set-up?

I should add that DP is completely on board with all this and wants to make things fair.

Background info: DP is a high earner (highest tax bracket), has an office job which is 50% wfh. We have been together about 10 years and will shortly have 2 under 2. We are planning on buying a house early next year, moving out of DP’s city flat to somewhere more family friendly.

So here’s what we’ve discussed so far:

1. get married. This’ll be a tiny, quick ceremony, followed by a big party later in the year, once we’ve moved.

1. Put me on the house deeds as joint owners even though the mortgage will be in DP’s name only.

1. Set up a account that DP’s income gets paid into, linked to all household / DCs related direct debits, standing orders and credit cards used for household / DCs.

1. Join account pays NI contributions for me, equal to those at my last salary. Not sure how to do this, are these just voluntary payments to HMRC?

1. Joint account pays into a private pension for me, at a rate we need to decide on. Not looked into this at all either, but I’m guessing a Google will bring up some options?

1. I receive a “personal allowance” into my personal account of roughly half my last salary. I can spend or save this how I wish. We may do similar for DP.

That’s all we’ve thought of so far. Does it sound alright? Is there anything glaringly obvious that we’ve missed? All tips welcome, so I don’t end up back here in a few years time bemoaning my position!

Not an expert but looks fair.
mid you claim child benefit your NI is paid which would be simpler.

hi
def do the payments into a private pension for you, I lost years to childcare, whilst his pension boomed.
we are still together, - married and now have our business and it was only about five years ago that he started paying into a private pension I had set up in my mid 20's which had stalled once married.
oh and i was allowed to 'spend the child benefit on myself,' ! yeah like that happened, all went on the kids of course

one thing I'd change is leaving all the money in JA & transferring out equal 'spends' or just using the JA. But that does depend on your attitudes to money. if one is a saver and one us a spender that doesn't always work out. But if you trf to personal accounts, it should be equal

Another thing you need to discuss before you go ahead, is what you expect of each other re housework laundry cooking childcare etc.

it's too easy to think well if he's working I'll do all that, but it's very easy as the SAHP to become resentful and the 'worker' to feel entitled not to lift a finger. He still lives there, they're still his children and he needs to do some cooking, as a minimum to pick up after himself and to engage fully with the children which means looking after them, bathing them, putting them to bed etc not just patting them on the head or kissing them goodnight before you take them up to bed,

IF you are both totally on the same page it can make for a lovely life, if you're not, it can be hell. But don't assume. Discuss it!

You might need to get some advice on point #2, because usually the mortgage has to mirror the deeds, and vice versa. It can be done the way you want it but it can be complex to arrange. It may just be easier to, when the time comes, buy a house jointly with a mortgage in both your names, but it’ll only be your DP’s income that’s considered for the mortgage because you won’t be earning.

Don't worry about the 'equivalent to previous earnings' bit for NI contributions - there are flat rates if you are unwaged, so previous salary isn't relevant. If you claim child benefit then NI contributions are made for you as part of that while the child is young. Alternatively (or if you are still not earning when your child/children pass the cutoff age) you need to make voluntary contributions (class 2 or 3 I think, there's a table.on the gov website that will tell you).

Thank you, that’s helpful. We’ve opted out of child benefit as DP’s salary is over the threshold and I think we would have had to pay it all back anyway. So I’ll do the NI contributions directly.

That was to @BinturongsSmellOfPopcorn

Please remember to sort out wills, I know it's sounds boring at such a happy time but until you are married nothing is certain.

keep child benefit in your name. Your DH will have to do a tax return anyway and he just puts it on there. That way you keep your NI records and it’s much easier

the principle should be you both have the same disposable income so it isn’t about paying you a salary- once bills are paid and you’ve contributed to savings, you should both have equal spends.

Thanks @SkylightSkylight , a fair division of labour is another thing we’ll need to figure out. We’re managing ok at the moment, but DO is on leave and I suspect we’ll need to be a bit more prescriptive once there’s 2 DC, DP is back to work and we’re living in a bigger place.

I am not sure about the comment giving up as it exceeds your income, surely you’re only liable for half the costs? Plus if he earns more then he should be liable for a higher percentage?

But you’re on your second kid unmarried living in his house, and on low income currently? Right?

so . I think until everything is done ie married finances done etc I’d not give up work. Well to be honest, I’d not give up, no way at all, but I’m not you. As right now it’s all,talk the truth is you’re pregnant with your second, living in your parents flat and unmarried.

You can claim child benefit but not receive the money. Far simpler than claiming and tax return etc etc.

Yes, you will get NI covered until the children are a certain age (12?) even if you don't actually get child benefit. Much better than paying £824 or whatever per year in catch up payments.

Can your name be on the deeds if it isn’t on the mortgage? Wouldn’t it be simpler to get a joint mortgage?
Keep the child benefit, this could be your allowance possibly?
I think in your case marriage will benefit you as you’ll have a claim on your future DH’s pension if you divorce and you could be eligible for spousal support as he’s a very high earner.

I’d put my energy into getting married and a joint house over ironing out NI details etc.

You can still get them to pay your NI contributions. You just opt out the payments

Think about also what you'll do if your soon to be husband dies or can't work.

Don't become his maid just because he's working from home and you're there not working. He can fetch his own dinner and cuppas just as he would in the office. It's not your job to remember where he left his xyz, he can learn to put it somewhere he'll remember or look for it himself. It's also not your job to tidy up after him, following around putting the bread back in the fridge, the tools back in the toolbox, hoovering the mess on the floor after he's done xyz or picking up towels/clothes from the bathroom floor. Even small children are taught to put away their toys after use, he can clear up after himself.

AFAIK HMRC sets the amount for NI including voluntary payments. You don't gain a different amount of pension or other benefits by paying in a higher amount. Claim child benefit in your name, you'll then automatically get NI credits. If he earns too much for you to be entitled to CB it'll be deducted from his wages by HMRC (think that's how it's done, he pays it back somehow anyway).

For the personal pension the amount paid in should mirror his, to be fair. So if you split you're on equal footing. If you don't split then you'll be richer as pensioners. This might be quite expensive because his employer may be putting into his pension too. If you're not paying in equal pension amounts, you could put you down as a higher percentage owner of the house than he is eg 70/30 split or whatever.

Anything you save isn't technically yours even if the account is in your sole name. In the event of a divorce it's a marital asset, so potentially half his. Just something to bear in mind if one of you is a spender and the other a saver. No point denying yourself things and being ultra frugal only to end up losing half of it in a divorce. So if you are financially very different in your attitudes it's worth considering whether being married is right for you, if you're making things fair financially anyway.

If you're in an unfair situation eg not working, no pension, don't own property - while he's furthering his career, building a pension and paying off a mortgage - it helps to be married so if you split you get some of the house, pension and savings (if applicable). If you're not married but you're co-owner of the property, have an equal pension pot and children's/household/ordinary life expenses come from his wages, then anything you save up from your share of the spare cash remains yours even if you split.

Do you have a job or a career? Will it be impacted by taking a break from working? That's something else taken into account if you're married and split up but not taken into account if you're only cohabiting.

He still needs to do something round the house. His role doesn't end with a 9-5. Children/home may be mostly you if it's your "job" now, but you can't be expected to be "on-call" 24/7, you need downtime too and "time off" if you're ill. He doesn't get to become like another child for you to look after. Also when he retires or you return to work, he has to step up and share tasks.

Pension needs to be at the same level as his, I would also say 7 needs to be higher

You should fill out the child benefit forms anyway and tick the box to not receive the payment. Then you get your NI paid and I think that form is what registers your child to get their NI number when they turn 16

I'd reserve some time to study or retrain preferably in a professional career, as who knows what the future may hold. It sounds like you could afford some childcare for a few hours a week, which would help with this. It would also give you a career to pick up once the children are older.

I don't think that paying a monthly amount on the basis of a percentage of previous (low level) salary is fair. In an equal partnership shouldn't all spare money be split equally?

I'm not clear why you're looking at the mortgage only being in DP's name but the bank may not allow it. My husband had to be included as he had the right to a claim on the property.

If you’re not working, the maximum you can pay into a private pension is £2880 per year which gets topped up to £3600 by HMRC.

You could also save into a LISA to use for your pension. The maximum you can pay into that is £4000 per year which gets topped up to £5000. You have to open it before you’re 40 and you can only pay into it until you reach the age of 50. It’s a really good deal because, unlike a pension, if you keep it until you retire you don’t get taxed on it when you take it out.

Oh yes, that’s what I did. Thank you, I feel a bit less of an idiot now, as I was thinking I’d really messed up by opting out unnecessarily

I don't understand 7. Will that leave both of you with the same disposable income?
Don't do any of this till you are married.
i would think about doing a part time job (after ML) for a couple of evenings (no childcare) to keep your hand in the world of work and for the adult company