To rely on my husband's pension in old age?

[user1483390742]

We are both early 50s. He has had a stable job earning £60k for 20 years and is paying into his company final salary pension scheme. He plans on staying there until he retires.
I have taken 4 years out, then worked PT (2 or 3 days pw) since the kids arrived 15 years ago. Have paid into a pension but am now worrying that it is worth peanuts!
Is it wrong to hope that DH's pension will keep us?

Yes, I think so. But if being kept by him for decades is your choice, and it works for you, then why ask? You’ve got another decade ahead of you, 15 years out of a working life of 45 years is a third of it.
I’d be looking at stashing as much away as possible, and focusing on how to reduce the running costs of your family as much as possible.

You'll both be receiving annual statements estimating what your pensions will be worth - so you should know what your income will be and be planning to make sure either a) you can cope in that income or b) be paying extra in to make sure that the income is sufficient. As your own pension is not likely to be very much, also worth checking what you'd be entitled to should something rubbish happen. We have an independent financial adviser who helps sort this - might be worth seeing someone.

I hate to bring this up but you are only in your early 50s, a lot might happen before then.

I know of several ladies who assumed that they would be able to live off of their husband's pension and they would have been able to as well.

Only problem was that they got divorced (two ladies) and the husband died (one lady)

I am sure that there are many other possible situations that could arise as well.

I would think very carefully before putting your future in the hands of your husband's pension fund.

”Is it wrong to hope that DH's pension will keep us?”

Presumably there are pension forecasts available which tell you what the predicted income will be from his pension?

If you mean is it wrong to hope DH’s pension will keep you, well that’s a risk, obviously, and it would seem sensible to plan for you to be able to manage on your own if necessary.

You will get your own state pension though as well

The question is in the payout. DH and I both have retirement savings that are basically the same as cash we can’t access until we are old. If one of us dies, the other gets the money. If we both die without it being used up, it goes to Dd. We also live in a jurisdiction where we are legally entitled to half of any retirement or pension generated during the marriage in the event of divorce.

Fil has an actual pension that sends him a monthly check now that he is retired. It only pays to him. If he dies tomorrow, mil gets nothing.

Try to ensure that your Dh's pension is put in a pot that transfers to you on his death. It won't generate as much income whilst he is alive as a pension that dies with him, but you'll need it if he goes first.

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We are in the process of swapping our funds over to avoid your fils precise situation.

If you get it in the event of him dying , yes, why not!! You are married it’s joint money why not? I always find it odd that anyone would think someone is living off their husbands money, I’m pretty sure you staying home to bring up the children supported him in a successful career

Speak to a pensions advisor. Without sounding morbid, your dh could die years before you, is the spousal element of his pension ok?

Some people in our work are transferring their pension pots to another provider where their pension is lower but the spousal pension paid on death is a bit higher. But don't do anything without expert advice.

If you get it in the event of him dying
What happens if you and your husband get divorced?

I wouldn’t want to rely solely on my Dh’s pension. We’re both in good final salary schemes and whichever of us dies first, the other gets the spousal pension, which is 50%. So ok as an addition to our own pension but not something I’d want to rely on solely.

I would get advice.

Yes. If your kids are now essentially grown up, what is stopping you from working more? Anything could happen to your husband - putting all of your expectations on his pension is very unwise.

If in UK log onto www.gov.uk/check-state-pension you will need your national insurance number it will tell you when you can claim and how much. Secondly, if you have a personal pension you should be able to view it on line or receive annual statements. You can always invest money I to other things, but may not be so tax efficient

Depends upon the pension really I think. Dh's is a good one, that is public sector, and I get 50% payments in the event of his death, so that, plus my state pension and my own employment pensions (LGPS and TPS) which start when I am 60 mean I won't be on the bread line.

If a couple divorces you are entitled to half your spouses pension. I just don’t get the supported by your husband line, my husband works out of the home, I look after the home, we support each other but in different ways

Mrsbird, as I pointed out, working life is around 45 years now. That’s a long time to be raising a family unless there are other factors the OP hasn’t mentioned.

It would be best to consider every scenario.

If you divorced it's possible to get some of his pension. Depending on the rules of the scheme you might be entitled to half of what the scheme will pay him. Or, you might get a cash sum to put into a pension pot which you could buy a pension with. Usually, this pension is far less than what the original scheme would pay but generally you will have other options.

If he died, you will need to find out how much the scheme will pay as a widows pension. This will be an important point because he may die before he retires or he may die before you but when you are 80/90 odd. There may be some other death benefits too so it's an idea to have this statement and file away safely just in case.

It might be worth considering exactly how much you will need to live on in retirement and doing some sums based on a number of scenarios. Speaking to a financial advisor might be a good idea. It's not too late to start paying (or increasing) pension contributions.

I wouldn't say you are unreasonable to live on your husbands pension, but I would urge you to think about what could happen so you know how you would be financially rather than the worst happening and you find it's too late to do anything about it.

you are allowed state pension "years entitlement" for your children from the birth of the oldest to the youngest reaches 16 - these year are included in your state entitlement. You can make up any missing years/amounts by paying upfront I second doing your forecast online

@Mrsbird311 not always as it's depends on other assets. Also, the actual payments may vary depending on the scheme rules.

For example, If the pension is £10,000 a year and a divorcing couple splits it 50/50 then that's £5,000 pa each. But some schemes will not pay the £5,000 as an annual pension to the ex-spouse but instead work out a cash equivalent amount which would have to be transferred to another pension. This sum can be used to buy a pension (known as an annuity) which is likely to be less than the original £5,000 a year. So, even if it was 50/50 it may not amount to the same anyway.

you can also increase your amount into your private pension (good tax saving move apparently)

In a similar boat to you OP but a few years younger. DH has a great pension which will be worth at least £33k per annum at current rates. My pension is tiny, around £50k pot plus full state pension. I pay very little in as self employed. Our house will soon be paid off though so will have £400-500k there in time of need and could move to a smaller house and release £250-300k fairly easily if required. No other assets.

It only recently occurred to me to check what happens if he dies before me. I think I get half his pension but I do need to double check that. I felt a bit silly for that not even occurring to me until now.

On the divorce front I was never worried as i’m Pretty sure i’d Get half of it in a divorce due to length of marriage, bringing up kids etc etc.

You can make up any missing years/amounts by paying upfront

There is a time limit on this which is normally 6 years but there are some exceptions. I have an incomplete year from 2005 but it's too late for me to make that year up.

Depends, the good news is that he has a final salary scheme. Is it final salary or career average (a lot of them changed to career average to keep costs down). Has he earns 60k for the last 20 years and what is the likelihood of salary increases? If you assume he will work for another 10 years he'll have 30 years of service so a gold plated 60th's scheme would give him a pension of 30k (if he has been paying Additional Voluntary Contributions to buy extra years of service it will be more than that, if a career average scheme and worse than a 60th's scheme it could be much less) If you think you can live comfortable on this plus state pensions then you should be ok. I'd get him to check what he is going to be entitled to though and I'd be cautious re divorce (although you'd likely get a share of his pension in a settlement)

Personally I'd look to increase your own pension provision by working more.

Secondly, why would you want to rely on some one else in your retirement for money. If you have no commitments to caring for sick child or relatives. Why wouldn't you earn your own money to be able to choose what you want to spend it on ! What happens if your DH blows all his pension on something that you don't agree about. The rules changed, you don't have to buy an annuity now