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.

You really need to sort out a pension. You cannot recapture the time value of money and saving later is far less valuable than saving now. It's more important than providing extras or activities or clubs or whatnot for your children. Don't be shortsighted. You can find/make free enrichment activities for them but you can't conjure money out of thin air when you are old or in ill health.

Yes, he's a selfish twat for deliberately downscaling what he could be contributing to the kids but if he's saving well now, at least he won't be a burden to them in old age. He could save AND downscale his current lifestyle in order to fund them.

Its the same as the thousands of self employed tradesmen who tell CSA that they earn £9,000 / year . Because everyone know that you can hire a joiner / electrician for £40 / day.

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.

I don't think OP is paying school fees, necessarily - she used it as an indication of how much £ is going into XH's pension i.e. £40k-£50k which is around the cost of to two sets of school fees.

There is a limit , it’s just that CSA don’t enforce it. Because it involves using a calculator and doing about half a page of simple calculations. Like percentages and additional and subtraction.

I do think it's ridiculous that CMS payments are calculated after pension. It's just a form of saving - they could equally argue that it should be after ISA contributions or whatever.

By the way @SylviasShoes - from the OP...

and is therefore paying less than 40% tax

So your edit to add something about £40k off a £200k salary meaning that the highest tax band would still kick in... well, it doesn't seem to be the OP's situation.

Here the link to the CSA guidelines , for any of you who want to work it out for your own situation. It’s volume 3, chapter 36.

https://assets.publishing.service.gov.uk/media/679a1200fe19800263dc7b5d/volume-3-variations-chapters-27-36.pdf

You will need a biro, piece of paper and your phone so it’s pretty technical 🙄

That's really interesting, Octavia. Thank you.

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

Just because you have money doesn’t mean you have to spend it, at least not right away. Saving is good!

He’s building wealth that one day your kids will most likely benefit from - help with uni costs or a housing deposit, for example, which is much more important than a few extra toys “whilst they are small.”

You don’t indicate in your OP that your kids are going without anything - they don’t need more stuff just because their dad has extra cash.

ThePartingOfTheWays - I know full well that it is not only the rich who play the "pension contributions trick" and that people look after themselves. Of course they do, and I cannot criticise people for playing according to the rules. The over 60s do indeed pay money into their pension pots - perhaps more than younger people do, as the reality of approaching retirement tends to hit you in the face at that age. They aren't the ones getting CB though (although they might be getting UC). By the way, I am fully on board with people being more self reliant in retirement, and I'm chucking a fair few thousand into pensions myself.

However, it appears that the benefits bill in this country is becoming increasingly unsustainable, and we should be looking at ways of ensuring it is those who need extra support who actually receive it.

I'm aware of the rules relating to pension contributions, but I'm not talking about the limits on how much you can pay in to gain a tax advantage, but the ability to claim benefits due to paying a great deal into a pension. I don't have an issue with some pension contributions being deducted for the purpose of determining eligibility for benefits such as CB and UC, but there should be a limit on the level of contributions which are taken into account, in order to prevent the wealthy taking advantage of the system. Which, of course, they are and will continue to do unless the rules are changed. Middle income families with children under 18 are unlikely to be able to afford to stash thousands into their pensions.

In my view, tax policy and eligibility to benefits should be moral issues for society. I don't think my moral compass is too far out on this. I would imagine that the majority of people believe that the wealthier amongst us should pay more tax, and that the poorest members of society should be supported by the state more than the wealthiest are. But we can agree to disagree on this.

He’s building wealth that one day your kids will most likely benefit from - help with uni costs or a housing deposit, for example, which is much more important than a few extra toys “whilst they are small.”

It's in a pension. Unclear how old the XH is, but fairly likely he won't be at the pension drawdown age before his kids go to uni.

ETA: some mild sarcasm
Putting away £40k odd a year into a pension is a hell of a lot of toys... I suspect OP is more concerned about covering food, clothing, housing etc on her income and the reduced CSA.

Sorry, by over 60s I meant money lol. As in, more of the people paying extra pensions to stay child benefit eligible will be earning 60 odd grand a year than 140 grand. I ought to have been more clear.

There's no need to agree to disagree on the richest paying more tax, as we concur there. But that's not what we're discussing. A person on say 65k who puts 5k extra into their pension to keep full CB is still paying a higher rate of income tax than a person on a much lower income, even if the latter is paying the same into their pension. And rightly so.

On the benefits point specifically, I think it's worth spelling out the problem we're facing in terms of our population pyramid and ageing society. We can raise the retirement age, and probably will again, but that doesn't translate to people being capable of working for longer. It's a good thing for the state, the benefits bill and wider society if more people have a larger pension pot allowing them to potentially fund themselves earlier rather than looking to claim health based benefits. Same with being able to stop work to take on unpaid care. We're likely to need more of this in the future, not less, which is why it's a good idea to have nudges for people to pay more into pensions. There are oodles of reasons.

And these benefits have to be funded. If you look at who's a net contributor and who isn't, it's rather sobering. None of which is to say that non net contributors aren't in many cases doing utterly vital work... but we need someone to pay in so these people still have public services, and sometimes their wages too. Incentivising people to work less is not something we can afford, and yet we have a tax and benefits system that does this at multiple income levels. The last thing we need to do is make it worse. At any point.

THANK YOU!

Her ex is most likely building wealth across his portfolio, and will be able to draw down different bits at different points. OP gives no indication that her kids are going without anything essential in the meantime.

My DH is retired now, but was a high earner and I imagine on a similar salary to OP’s ex for most of his career. I was also a reasonably high earner though went part time after having dc.

We always lived well within our means, saving and investing as much as we could. We didn’t spend money just because we had it - the kids had a sensible number of toys, mostly second hand clothes from charity shops, and we only replaced things when they broke or no longer fit.

Over the decades, with time in the stock market, our investments have grown substantially - more than quadrupling the money we actually saved. And it’s the money we were able to save 20 years ago when the kids were little that has made the most difference.

We’ve ended up in the incredibly fortunate position of being able to put both our kids through university with no student debt. Two years ago we gave our DD £200,000 to buy a house, and another £50,000 to do it up. Our DS will get the same amount when he’s ready to settle down and buy.

Neither of them begrudges the times in their childhoods when they didn't get the trending toy of a particular month, or specific items of clothing to match passing trends. They understand that our frugal lifestyle back then built the wealth that gives them the comfortable, secure lifestyle they now enjoy.

@VioletVX that's great, but you made those decisions together, as a couple.

The decisions that the XH is making impacts in the amount of CM that he pays, meaning OP gets to the end of the month with no money left over for saving. The XH may or may not use the money to benefit his kids in future, but by taking the action he is now, he is preventing the RP having any of that flexibility when she will not have any access to the savings in future, as they are divorced.

And it is of course not unheard of that he saves the money and doesn't do things for his kids down the line...

By the way, if he wants to make ISA or other investment contributions to build a portfolio- well, fine, because CSA would be calculated before any of those things.

I can see how that’s galling. He has enough spare cash each month to do this, if you were still married, his children’s needs or wants would presumably come first.

It was more the OP’s anti-saving comment that I was responding to - 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.

I.e. She would rather the ex bought the dc more things now rather saving for the future.

I think because he pays CSA based off his income after pension deductions. So one way to minimise CSA is to make it look like you are earning less by chucking a massive over payment into your pension. If it's done to minimise your CSAabd thereby negatively affecting your dc then it's immoral. Not sure about the legalities

Huh? You mean maybe the dc will be grateful that he paid as little as he could whilst they were growing up so he could have a comfortable retirement?
How is that ok?
They are his responsibility

Depends whether he is covering ALL costs fairly or whether he is as so many do, just paying CSA and expecting her to pay for all the extra expenses that CSA wouldn't cover. In other words he pays half of the basics but expects her to cover all costs of any enrichment. Like sports, school trips, school uniform replacement etc

Not the point at all. The dc should be being financed appropriately as they grow up and not expect mum to cover all the extra expenses that the CSA doesn't touch

She also said:
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.

I doubt that is because she is spending hundreds on toys a month.

ThePartingOfTheWays - I don't disagree with what you have said in your last post. Perhaps we can agree that governments over decades have managed to mess things up with taxes, pensions and benefits! 🙄

When I briefly worked for CMS a colleague and I actually had bets with each other (just a "I bet this is one..." to each other not money bets) on this.

Could usually guess right away when a "my income is not correct so there needs to be a recalculation" and sure enough a new income with considerably higher pension contributions would appear.

It's very common. Not as common as "I don't see them so I don't have to pay this, right?" ones, but very common.

How anyone can say its not morally wrong to deliberately deprive your dc is beyond my comprehension.
He is severely lacking in his moral obligations.
End of!!