Husband has a better pension than me should I be worried?

[Nopensiopottopiissin]

So this is about pensions. I took a private pension out in my mid twenties (I'm 40) as I was self employed. I paid in for about eight year roughly £100 per month, then I got a job so I took a work pension out instead which was a similar amount but employers doubled it. During this time I got married after our son was born I became a sahm I didn't pay into a pension for 5 years. This as something we before wanted and it's allowed my husband to build his career. The last year I've worked part time and only paid about £2o a month into the pension which again employer doubles. My dh and I were talking last night and I discovered that he pays £350 a month into his pension which his employer matches and he's been doing that for about 12 years. We have joint income so everything goes in same pot. I now feel a bit concerned that my pension is going to be very small compared to his which is fine unless we split up or he dies. Then I might be screwed. I am annoyed because we can't afford for me to pay a similar amount we literally wouldn't have enough left to pay bills. So is it reasonable that he gets such a large chunk of our money to pay into a pension pot and I don't? Is there anyone else in a similar situation to me?

If he dies you will likely gain half his pension (you can check this), if you split up the pension will be an asset of the marriage.

He's been a slyboots, hasn't he? Halve the 350 and put it into your pension.

Have a dekko at what his pension offers.

If he dies, you should get tax-free lump sum, pension for children up to 23 in education, and a survivor's pension for life. I say that, but I'm basing it on my experience of local authority pensions.

Have you paid into your state pension - you can top that going back so many years - get DH to pay it.

Halve the 350 and put it into your pension.

There won’t be £350 available due to tax relief, the family would literally be missing out on free money.

How have you only just realised this? If he's been deliberately keeping this from you then that's really worrying.

It seems ok to me, OP. His employer is matching - would be a shame to miss out on that element.

My pension pot is a lot higher than my husbands as i put far more into my employers scheme, it's a better scheme than his.

It doesn't bother us at all. It's in my name but it will contribute to both of our lifestyles when we (ever) retire.

If we split up (not on the cards) it will be shared between us.

I pay a lot into my pension each month but that’s because it’s my nhs pension and I don’t get a choice of how much just in the scheme or not and it would be daft to not do it really. I think it makes a difference whether this is the standard payment for his workplace pension or if he is choosing to use family money to pay extra in.

My family will benefit much more from me being in the nhs scheme than me coming out of it and us paying the same money split between a private pension each.

If his employer will match it and yours won’t then that makes a difference too.

It sounds like the issue is that you haven’t discussed retirement finances properly. I would start there and look at what each of you will have in retirement and then you can work out what would be best for you both, including protecting you in a situation where you split up or he died.

If you divorce, you will be entitled to a share of his pension as part of the settlement.

If he dies you may be entitled to a spouse's pension - check the T&Cs of his pension provider.

Hmm..

Can he choose to pay less into his pension. You would lose out as a family as it would be taxed and his employer wouldnt match it but you could put whatever is left into your pension?

Check your state pension in case you can top up any years to make them eligible - he should pay.

Can you get a better paid job?

@GiantSpider

If you divorce, you will be entitled to a share of his pension as part of the settlement.

If he dies you may be entitled to a spouse's pension - check the T&Cs of his pension provider.

This is a good point. If you divorce they can take it into account. Still worth looking at boosting yours though I think for peace of mind.

I'm a SAHP.

My husband has recently got into pensions and has transferred our various work ones into a single pension bee account. He's adding to his, but is also topping up mine where he can. I think if your husband is able to he should be topping up yours a bit as well. All part of sharing your joint assets. It can also be quite tax efficient as he can split payments between the accounts and use your tax allowance.

Make sure you claim child benefit in your name as well. Husband earns to much for us to get the money but it registers me as not working to raise kids. That then counts towards my NI and state pension.

I think its something that easily isn't discussed when you're busy with children.
If he knows you're concerned and you have a joint pot, he should be willing to balance up your pension.

You should be paying the bills etc before he pays his pension. You need to sit down and have a discussion about finances.

You’re married so at least you have some protection there. There’s many women who have children and are not married and are stay at home mums or part time who don’t have a good pension. It might all be ok now, but I feel strongly about having my own pension / being able to enjoy a good retirement. I work hard and will have a decent pension at the end of it. I did work part time for a number of years due to health but am back full time now. I intend to start paying more in to make up for those years. I don’t get a choice how much I pay into my pension, it’s a percentage and is taken like tax is so I don’t ever see it. It would be silly to reduce your husbands as his employer matches it. My advice is to work full time and when your children are older and costs lower with no childcare then start boosting your pension

Worth finding out if all the £350 is matched? If it is, it seems like a no brainer. Plus it reduces the taxable salary.

I'd be very surprised if there wasn't death in service and a spousal pension attached to his given the level of matching implied.

@Twizbe I'd double check the child benefit as my understanding is that if either of you earn over £60k, neither of you can claim. Or at least if either of you earn over £50k, you pay back a proportion to through a tax charge. By the time your salary is £60k it is all paid back. I'm sure someone will be along to tell me if this is wrong, but that's how I've read the guidance.

It’s a gamble isn’t it? Yes you could “halve” the £350 but you are missing out on the tax relief and his employer’s contribution. That could be almost £250 per month of free money that the household is losing out on. On the other hand, you could (depending on the terms of his pension) find yourself up shit creek if he dies. If you split, the pension will be on the table as a marital asset.

@Daffodil77 you don't get the money but you get the NI record

@Twizbe Your husband cannot just pay into your pension. If you don't work, your annual allowance is only £3600pa.

@Daffodil77 that was my understanding too. However, its earnings less pension contribution so if someone earns £60k and pays £10k into the pension that brings it down to £50k so nothing will be paid back. (As an example).

OP. Firstly I would be annoyed DH was doing this without your knowledge. However, if it is a pot of money then if he dies you can receive the whole pot and if you were to divorce the pot can be split. Not necessarily 50/50 as it will depend on your other assets.

If it's a pot of money and he decides to eventually take all the money for his own benefit or buy an annuity with no spouse pension then he's literally taken family money for his sole benefit.

If you have a good relationship and you trust him otherwise, then paying into his pension may be more beneficial compared to paying into your pension due to the employer contribution and if he's a higher rate tax payer he'll get more tax relief than you.

It is tax efficient for it to be coming out of salary especially if he’s a higher rate tax payer. At some point you should be thinking more about your own and getting your own career back on track. £20 a month isn’t really going to cut it.

It would be financial madness for him to not contribute thereby losing the tax relief and matched contributions. You’d both lose out. But you’re right to be concerned about what you’re putting away. It sounds like the only way you’d be able to put more away is by earning more.

If a spouse dies do you automatically get their pension?

@Twizbe

I'm a SAHP.

My husband has recently got into pensions and has transferred our various work ones into a single pension bee account. He's adding to his, but is also topping up mine where he can. I think if your husband is able to he should be topping up yours a bit as well. All part of sharing your joint assets. It can also be quite tax efficient as he can split payments between the accounts and use your tax allowance.

Make sure you claim child benefit in your name as well. Husband earns to much for us to get the money but it registers me as not working to raise kids. That then counts towards my NI and state pension.

That isnt correct and sound quite concerning

He's been paying £350 per month of joint money into his pension for 12 years and never told you???? Where did you think the £350 was going? That's really unfair and sneaky.

I'd make a joint appointment with a financial advisor and talk about pensions and planning for retirement - how much money you will need for the lifestyle you want, and discuss the value of both your pensions. Maybe the pensions advisor will be able to suggest how to make this more equal.

But I'd be really angry with my h if he did this.

If you work full time you will be upping your contribution and have more spare income in the household.

To be fair with 5 years out of work and only £100 a month while self employed, he was always going to have the bigger pension.