Is it morally wrong to put large amounts into pension.

[Gearandglasses]

I found out that my exh is doing this and is therefore paying less than 40% tax and also making CSA think that he is not as high an earner as he thinks. The difference is significant, think school fees for two per year.
I don't need the money to live since I work and take care of the children full time, it just seems a little off that he'd prefer to put money away instead of buying things for the children now, whilst they are small. It just left a bitter taste, since I have nothing left each month to even think about a pension let alone high contributions as all my money goes on the children.

Op leave him to it..let his pension take care of him when he's old because if he's doing this with intent to pay the kids less then I certainly hope they repay the favour when he's old by not looking after him or seeing him.

You added a whole extra bit. This bit to be exact:

He could earn £200K pa so putting £40K into a pension won't reduce him to a lower tax band. Anything over £150K is the highest tax band.

Not sure why you're being disingenuous about it now.

Effectively not declaring £40K worth of salary would make a difference to child support contributions whether you were on £70K or £200K.

Wow didn't know this! This should be changed! The whole CMS and avoiding paying aspect really annoys me

Of course people should pay into their pension but how much you can afford to do so depends on your financial obligations, including your kids!

It doesn't apply here if there is a clean break, but I am annoyed it applies in general!!

To avoid this, it's fairly conventional on here if you are making a meaningful edit to write "ETA including the link" or "ETA a worked example".

As you can infer from both of the replying posts, we consider the edit was meaningful and not for spelling.

The point you made if I remember was about avoiding tax- not CSA.

That's very different.

Depends very much on how much someone is earning, at pinch-points and cliff-edges the marginal rates and consequences are horrific and may do more harm than good for the family as a whole.
I'm currently putting £1,000 each week into my pension to avoid paying nearly 70% tax, for context, I am paying the same in income tax and NI.
At 49% deductions, I would suffer the tax and spend the money, at 51% I won't.

Do stop. You're coming over as the Posting Police!

I feel like you really want to 'win' this so I'll leave you to it.

Thanks for your concern, but I am OK with coming across that way 🙂

If you think his pension contributions are unreasonably high, you can ask CMS to do a variation on the grounds on diversion of income via excessive pension contributions. What is considered excessive depends on factors like

the age at which he started paying into his Pension
The percentage of his salary that he is paying
the size of his existing pension pot
his projected pension income in retirement

Nah she's right, it's bad form to substantially alter posts after they've been written without acknowledging it.

Useful post!

Not very often. Every 2 years supposedly but in reality it was so poorly organised it rarely happened. 8 years in, when my ex was bragging about his 120k salary I involved my MP to ask for a review for our children’s CSA that was based on a 35k salary.

Of course it jumped, he started ploughing as much as he was able into his pension, then refused to pay for 2 years. I never received more than £350 a month for our 4 kids. It took 2 years and an attachment to earnings to get that.

Agree on the first point, not at all on the second. That's a proper be careful what you wish for situation.

We need people to be paying into their pensions, and we also need an incentive for those in the tax brackets who'd be affected by this not to work less. They face significant marginal rates of taxation, plus fiscal drag like all of us. Given that more people earn 60 odd grand a year than earn 140, it's likely that most of the people doing this are at the lower end of that bracket putting in smaller amounts rather than people on 140k socking away 60k, in any case (or possibly in the 100k cliff edge, but that's a specific problem in itself).

In a society with a labour and skills shortage, a squeeze on earned income plus this population pyramid, the last thing we should do is disincentivise people from working and saving for their retirements. In our household, the relevant earner would simply have dropped some hours in order to stay under the threshold if pension contributions couldn't be taken into account, and indeed was planning to do so until the CB threshold was lifted so the issue didn't arise. There are plenty like us.

@Rachie1973 thanks for the info and sorry your ex was such a twat with money!

lol the kids realised what he was like as they reached adulthood. They have little to do with him now. His loss.

You think it is morally fair for people on low wages to be effectively subsidising the pension pots of high earners by permitting those high earners to access benefits that would be better directed at those who really need the money?

I know of people who have put tens of thousand of pounds per year into their pensions and thereby are entitled to CB. There should at least be an upper limit on the level of pension contributions which will be taken into account. I will accept that the marginal rate is a matter that needs to be tackled by the government.

Most people would not cut back on their hours in order to keep CB. It’s a similar argument to the one that says all high earners are leaving the country. And, in any event, times are changing. Recently, I am hearing about redundancies, companies cutting back on staff and people struggling to find jobs. People who once considered themselves to be indispensable and able to dictate their working hours etc, may not be so secure in the very near future.

I have mixed views on this.

Parents with care (90% of whom are female) suffer disproportionately from the costs of raising children. It's not just food, clothes and clubs, it's things like housing with an additional bedroom(s) for the DC, therefore with associated utility costs and toiletries, etc. And that's before even considering things like childcare costs to enable that parent to work. A non-resident parent paying a couple of hundred isn't even scratching the surface and doesn't have the mental load of working it all out either. Plus they usually have the benefit of free childcare provided by the parent with care (based on arrangements of EOW and one weekday evening, which is still by far the most common arrangement).

At the very least CM should include 50% actual childcare costs IMO.

In this scenario I'd want to know if the DC are having their needs met, and to a standard that is reasonably similar to what they could expect if their parents were still together.

The question is not whether it's right if the OP cannot afford to pay into a pension while her XH does. The question is whether she cannot do so because of this. Is she subsidising his pension?

I'd want to know if she sacrificed her career to raise the DC when she was still with XH? Can she not pay into a pension because she's paying for childcare? Because if so, he's profiteering off her hard work.

If OTOH she could work more but doesn't want to, and if XH is prepared to pay for childcare and is already paying way above normal living costs, then he's not doing anything wrong.

I think there should be a limit on the amount of pension contributions disregarded by CMS. So your Child Maintenance payment could be based on your salary net of up to 5% pension contribution. You still get the tax benefits for saving for the money, but you can't dodge your responsibility to pay towards your children's costs.

The reality is that resident parents will not generally let their children go without, but if there isn't enough money the RP will save less towards their pension or mortgage.

Of course he can do what he wants. Of course we are wrong to assume. But the amount of men who up their pension contribution after the CMS sends in a payroll deduction letter, are suspicious.

If you think it's only higher earners who do the pension contributions trick, I've got a bridge to sell you! Works on UC too. As a general rule, I think it's best not to base views on tax policy around your moral assessments of what people should and shouldn't do. Human beings have an inconvenient habit of prioritising themselves.

I can't speak to your circle, but the reality is that there are going to be more people in the general population who are in the 60s and putting a few grand extra in than there are people who are able to put tens of thousands in a pension each year. There already is an upper limit, so you're arguing for something that exists.

And no, saying that people will decline overtime, drop to 4.5 days from 5 or not take on a new bit of self employed work isn't remotely like saying they'll do something as radical as move abroad. The former clearly involves much, much less upheaval than the latter. As such, there's a massive gulf between the two.

You presumably know there are lots of people who aren't remotely at risk of redundancy, and no downturn ever affects the entire population. Even taking your point at it highest, and all the people who think they can dictate their hours now are wrong and regret it at some unspecified point in the future, that's still revenue to the Exchequer and skills being lost now. These are not risks we should be taking on the back of vague ideas that people will do what we want them to do instead of what they want to do.

Agree that something like this makes sense. Doesn't stop the NRP putting more than 5% in if they feel they can afford it as well as CM, but makes the calculation of CM fairer.

His salary will be clear to the CSA and is not reduced by pension contributions.

It looks like a financial agreement is in place and that he’s paying what was agreed, so what he is doing now is really none of your business.

His salary will be clear to the CSA and is not reduced by pension contributions.

Once more for the cheap seats... CSA makes its calculations after pension contributions, so yes, CMS payments ARE reduced by pension contributions.

The OP hasn't really said much in terms of how often exH has the children, keeps up with maintenance payments, the extra things he may do with the children when he has them etc etc. I also think " school fees" aren't really important, if you find it difficult to keep up with paying for them then take them out of private education.

You aren't together anymore. As long as he's stepping up and still being a Dad financially and physically then suck it up!