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.

For whom, in this instance?

Are the children deprived? Of what?

He certainly should be paying his fair share of their expenses. BUT, their expenses should be managed to a level that they don't deplete every bit of their parents' income; both parents also should be saving into their pensions.

It will be impossible to recapture the opportunity to save and invest at this age, and failing to save now will significantly affect the parents' old-age security. Better that the kids should lead a more modest existence now than the parents be in penury then.

Are they doing without anything now?

Kids whose parents aren't divorced don't need every bit of income spent on them, nor do kids whose parents are divorced.

If I were the OP I would maximize my pension contributions and make do with what is left over. The chance doesn't come around twice. It's not going to traumatize the children if they can't have all the latest gadgets, the sports clubs and toys. Frugally obtaining things via charity shops, libraries, Freecycle etc. is not a hardship, nor is finding activities that don't cost money.

Well good on him, eh, well done.

The OP said that her Ex H pension contributions take him out of the 40% tax bracket, which is roughly 50-125K . And it’s two sets of school fees, so let’s assume average fees of 18k, so 36k. To make the maths easy, lets say he earns 80K and he's putting 40K info his pension, which puts him below the 40% tax.

To calculate if this is excessive , the CMS look at the age he started paying into his pension, let’s say that that was 35. So it’s reasonable to pay 16-22% of his salary into his pension. But he’s actually paying 50%.

Then they look at his projected private pension, so you need his age now, his age at retirement, the amount he has in his pension pot now and whether or not he will get the full state pension. That allows you to calculate how much his projected pension will be.

Then you look at the benchmark figures for what % of hits current income he will need in retirement. For 40K thats 60% . So he needs 24K a year to live at the standard he is now.

If the projected pension income is a lot more than 24k per years ( you take account of the state pension of about 11k if he will get it) then you have an arguement that he's making excessive pension contributions.

Yes it’s a good thing to save into your pension. But not at the expenses of supporting your children now.

Him spending on his pension doesn’t prevent op asking for alternative financial support for DCs from him. She cannot go to court and ask for a different settlement regarding their finances. Clean break means no further claims so he’s free to do what he wants without question. We don’t know if he provides holidays or extras for DC. All we know is the CMS dilemma.

Salary is the amount earned over the course of a year and is therefore not reduced by pension contributions or other deductions.

So that sentence, quoted in bold, is absolutely correct.

Another useful post @0ctavia

However...

CSA makes its calculations after pension contributions

Is absolutely true. Excessive pension contributions are a popular ploy to reduce cm payments.

Very well, quoting your post in full…

The OP’s initial question was whether what her XH was doing was morally wrong.

My work allows me to sacrifice as much salary as I want into pension provided I don’t go below minimum wage (and obviously stay within any HMRC limits).

If I had non resident children and had remarried, and my new husband’s salary was enough for us both to live on - or if I was living off money inherited after my divorce, say - would I be morally right to sacrifice all my salary above minimum wage into a pension and pay a few quid a week towards the upkeep of my kids?

I would say no - wouldn’t you? And I would also say anyone telling my ex in that situation it was “none of his busines” would be being spectacularly unkind to that ex - wouldn’t you?

(Judging by Octavia’s later worked examples, even the CMS might conclude I was being unreasonable and that there should be a fair adjustment upwards to my child support in that situation…)

This! Unfair that you are left with no money to make pension contributions, due to him reducing his CSA payments by making massive contributions.

You don’t like people disagreeing with you, do you?

The CSA looks at the overall picture and doesn’t allow people to escape their financial responsibilities by, for example, making sudden, large pension contributions.

if this is happening, then something has gone wrong somewhere along the line, when sudden claimed increased financial outgoing is not challenged in the correct manner.

This is most unusual - agreements are normally made and the parties move forward accordingly, with no suggestion of retrospective changing of the goal posts.

You don’t like people disagreeing with you, do you?

What a strange comment! This is a discussion forum, we each make points and respond to the other,

A question you could have asked the OP was whether the pension contributions had increased (by 40k+!) since the financial agreement. As whatever the CSA do in theory, we all know they aren’t the speediest in practice.

Out of interest - do you think I would be morally wrong if I did reduce my salary to minimum wage, as per my scenario above, and continue on that basis unless and until CSA came calling for the difference?

Where people may be able put any amount into their pension. Cms will only consider a reasonable amount they have a max, being put in when working out their calculations. Regardless how much they have put in above what cms will acknowledge. They do this so men/women who are the paying parent can’t have payment reduced to much when considering pension contributions to keep it fair x

We are a blended family where we pay maintance for my step son but also receive cms from my ex husband. Personally as long as I receive a reasonable amount from my ex for our children, what he puts in his pension that would/may reduce his payments ever so slightly, I’m not fussed. As long as the children do not suffer then I think it’s important non resident parents can a) live and b) plan for their future financially.

What I strongly disagree with with cms is they only consider 3 or more children, so for me my ex only pays for 3 or our 5 children. To me that is highly unfair because 2 children he is not liable to contribute for, when he should have a financial responsibility for all the children he too choice to have. But hey ho, it is not a perfect system but it’s a lot fairer than it once was x

The CSA knows the financial details, you don’t, yet you make big assumptions.

The facts are that the CSA have reviewed matters in detail and the guy is honoring the stipulated payments.

Time to move on…..please!!

If you paid a bit extra into your pension would he have to pay you more?

If that’s a possibility it would have the benefit of setting you up for retirement and pissing him off.

It’s not clear to me what “big assumptions” you mean - the £40k I mention is from the op’s post re school fees and the concept that the CMS is not always reactive to changes in NRP income is borne out by thread after thread on here.

But sure, happy not to engage with you further. Sleep well!

No - anything the NRP has to pay is based on their income and circumstances eg number of other kids. Changes to op’s finances do not change the payments

Good night.

It's not morally wrong to pay into a pension but it is morally wrong not to give your children the support that they need when you are able to do so.

What proportion of his pension has the OP got via the divorce settlement? Pensions are part of the financial settlement so what has she got? Often where the pension is disregarded, she’s kept the house. There’s silence on the financial agreement of the divorce. So what has she got from the total assets if she’s not got any of his pension? There whole picture is not clear and has not been explained. At the worst, all assets were 50/50. So what was her share? Given that it’s clean break, she cannot go back and ask for a greater settlement but she must have at least 50% of what was in the family financial pot.

@TizerorFizz TBF to the OP, this has become one of those threads that is more a discussion on an ethical issue - OP posted twice on Monday afternoon and it's ballooned without her since.

@SheilaFentiman Yes! I can see that. However in any discussion on pensions and salary post a clean break financial settlement the whole settlement matters. It very much matters if his pension is part of the settlement. So of course theories and views abound, probably sparked by a journalist, but the financial remedy agreed actually matters. A lot. Otherwise it’s pure speculation.

1. The amount he can put in is pension tax free is tapered the more you earn, and in any case is limited to £60k, so if he puts in more than that he’s just doing it to reduce his child support, he doesn’t get tax benefits.
2. The CSA can depart from their standard formula in cases such as this, so if you felt strongly you might be able to get more money.
3. Finally, he might just not like you having the money and not spending it on the children but yourself, if he keeps it he is presumably perfectly at liberty to spend money on them himself even if he doesn’t now.