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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

DP and I never disagree about money but....

127 replies

DPpension · 02/02/2022 21:37

We just disagreed about money.

We both live together and own a property in both names with 50/50 split on the deeds. I’ve tried to make this post as unbiased as poss so bear with!

We have always split household bills according to an equal 40% of take home pay.

So one of us takes home 3.2k per month and one of us 1.9k.

The 1.9k Person contributes £780 and the 3.2k person contributes £1300 which is circa 40% of our net take home pay each. The rest of the money is that persons to do what they see fit.

Both pensions are matched by employer at 10% but given their higher earnings the higher earner pension is higher overall.

We’ve disagreed tonight about whether the contribution should be based on net pay or gross pay.

Should it be split by gross or net?

OP posts:
NuffSaidSam · 02/02/2022 21:40

Net.

NuffSaidSam · 02/02/2022 21:40

I'm assuming no kids as not mentioned.

GertrudePerkinsPaperyThing · 02/02/2022 21:42

Whichever one favours the lower earner - sorry my brain has gone to mush!

Aisten · 02/02/2022 21:43

Net pay makes the most sense to me, as that's what you've actually got in the pot.

Is the issue that the higher earner is paying a higher rate of tax so gross pay would distort the % of contribution?

Comedycook · 02/02/2022 21:44

@Aisten

Net pay makes the most sense to me, as that's what you've actually got in the pot.

Is the issue that the higher earner is paying a higher rate of tax so gross pay would distort the % of contribution?

I agree with this I think.
CrinklyCraggy · 02/02/2022 21:45

Net, as in after tax, but presumably the query is whether it should be after pension contributions which are savings?

I don't think it's right that one person has more residual income than the other though so you're doing it all wrong anyway. How can you live in a partnership with someone where one partner has significantly more spending money than the other?

Original poster
DPpension · 02/02/2022 21:45

The issue is that the lower earner is concerned that the pension pot is effectively lower for them splitting in this way, so inequitable

OP posts:
CrinklyCraggy · 02/02/2022 21:46

@DPpension

The issue is that the lower earner is concerned that the pension pot is effectively lower for them splitting in this way, so inequitable
Yes, they're right. The higher earner is getting all their spending money plus higher pension contributions, but you're not splitting anything equally anyway.
ByMyName · 02/02/2022 21:47

I recently had a similar discussion with DH. No disagreement, we both wanted to do the fair thing.

DH gets employer’s contributions plus the option of topping up which he is. I have my own business and I have more flexibility. We’ve decided that my contribution will match his - same gross contribution.

Quartz2208 · 02/02/2022 21:47

net

But why the argument because gross would be around 1150 for one and 1650 for other - so a fairly even increase. What would the increase mean

Your username implies a pension issue

TippledPink · 02/02/2022 21:49

You should split evenly what was left over after paying a percentage towards bills and pensions. You are a partnership no?

TippledPink · 02/02/2022 21:50

Oh and I am the higher earner here, we take the same allowance after pension, bills etc then save the rest.

SvartePetter · 02/02/2022 21:51

I think gross as I guess the pension is deducted pretax, so the higher earner effectively gets to save more? Perhaps if you write down the actual numbers of pension contributions and tax it is clearer.

Although, how much is the actual difference?

Thurlow · 02/02/2022 21:52

Net. You should put in 40% of what comes into your actual bank account each month.

NYnewstart · 02/02/2022 21:55

It’s all unfair as the higher earner has twice the amount of money to spend each month than the lower one. Such a big difference!

NYnewstart · 02/02/2022 21:56

@DPpension

The issue is that the lower earner is concerned that the pension pot is effectively lower for them splitting in this way, so inequitable
Absolutely
NuffSaidSam · 02/02/2022 21:58

@DPpension

The issue is that the lower earner is concerned that the pension pot is effectively lower for them splitting in this way, so inequitable
But your system is inequitable anyway. The higher earner has more spare cash to save/spend as they see fit.

Presumably, the higher earner will have the higher pension, but they pay more of the bills anyway so the situation will be the same as it is now.

Luredbyapomegranate · 02/02/2022 22:03

Net. Cos net is what you get.

AnotherEmma · 02/02/2022 22:03

The higher earner earns 63% of the couple's net income and should pay 63% of the bills. For the lower earner it's 37%. So if your total bills are £2080, the higher earner should pay £1310 and the lower earner £770. Which is pretty much what you pay so that was all a bit pointless Grin

Whether or not you even out the pension contributions / pension pots and amount of disposable income depends on a lot of factors. I assume you are not married (as you say partner not husband/wife). Do you have children together or from previous marriages? Do you have wills and insurances with each other as beneficiaries? Would the lower earner get any of the higher earner's pension in the event of their death?

Luredbyapomegranate · 02/02/2022 22:04

… however I personally think that couples should pool their resources. You may not agree, but if you are the lower earner you need to think c putting away extra to maintain the same lifestyle.

AnotherEmma · 02/02/2022 22:04

from previous relationships (not just marriages), sorry

tiredanddangerous · 02/02/2022 22:15

Net because that's the money you actually have

sanbeiji · 02/02/2022 22:26

Net. But what’s the relevance of pensions?
If you wanted to pool assets and ‘even up’ living standards get married.
As it stands unless lower earner makes up for it with the bulk of childcare they have no right to benefit from the higher earner anymore than they already are.

sanbeiji · 02/02/2022 22:28

Just to add DP earns about 15K more than me.
When we started out we had the same salaries, but the fixed amount we put into the joint more than covers all our necessities. I see no reason for him to increase his contribution ‘just because’ he earns more. He sometimes gets an extra takeaway etc and pays himself, but otherwise. I don’t feel entitled to his money!

FrangipaniBlue · 02/02/2022 22:29

I agree it should be net but I think you need to separate out the pensions issue from the bills.

Whether/how you fairly even up the pensions imbalance depends on 2 things for me.

If the lower earner has the lower earnings through mutual agreement ie they became a SAHP, part time or whatever to raise DC then it needs evened out in a fair way.

But if there are no DC and the inequality is purely down to the two individuals different career choices then I'm inclined to say tough, it is what it is?

What would the lower earner like to see happen to even out the pensions? For example, would they like to save an equivalent amount to what the higher earner is putting in their pension or do they have the option to top up their pension to a similar level?

Whichever you went with, that money should come out BEFORE you calculate the bills, so effectively reducing the lower earners "net" pay? Higher earner then pays slightly more towards the bills if that makes sense?

I don't agree however with the MN view that both partners should have the same "spending" money left. I'm a lot higher earner than DH but that's because I've worked harder over the years to further my career.

I pay more towards the household costs and I pay more towards family treats, but I don't see why I shouldn't also have more leftover at the end to treat myself (if I wanted to) as well?!