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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:
BarbaraofSeville · 03/02/2022 06:02

^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^

Neither. You have highlighted the unfairness when people split contribuutions as X% of salary, when there is a big difference. The percentage the higher earner has left is much larger and in extreme circumstances you could have the lower earner with little or no personal spending money and the higher earner with many times more.

It would be more fair to combine incomes, pay out all joint costs, possibly look at some extra pension for the lower earner out of joint money, save for joint household costs like holidays, appliance replacement, property maintenance etc and split the remainder 50/50.

Of course you could consider the reasons for the earnings disparity. if the lower earner earns less simply because they're in a lower earning profession like nursing or teaching, they shouldn't be disadvantaged in a way that would be reasonable if they had chosen to work part time or not progress because they expected to be supported by the higher earning partner.

Cottonfrenzie · 03/02/2022 06:50

@FrangipaniBlue

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?!

As the lower earner in my relationship I completely agree with this post

My husband pays more of the bills etc as he earns more. We pool savings. He has more disposable income, but it's not like I can't afford to do anything so I'm fine with that. He has a bigger pension than me - it never even occured to me I should get him topping up mine! I find it an odd idea really. He works in a sector where he will always earn more than me (I'm a teacher). It was my choice to pick this career and his choice to pick his. I really don't think im entitled to a completely even spilt as I don't think he should subsidise my life choice. It's enough of a subsidy in the bill spilt.

I don't understand the thought process behind the opening post to be honest. Only maybe if the lower earner sacrificed some of their career/pension whilst being a sahp or in some other way which may have benefited the higher earner

TheAverageUser · 03/02/2022 06:58

Net

Dindundundundeeer · 03/02/2022 06:58

Why is the pension an issue? The pension relates to earnings too. Pension is legally delayed salary so it ‘fits’ the process.

What the whole situation misses is the fact that legally married couples are joint, but that might change over time if it can be shown that with no kids you never ‘joined’ finances.

Personally it seems nuts to me.

Drunkpanda · 03/02/2022 07:05

@Cottonfrenzie I'm struggling to see why you should have less disposable income than your dh, unless you both view teaching as giving you more leisure time and an easier ride than whatever his job is. That he's happy with this split is not good.

catfunk · 03/02/2022 07:09

Net. and it's not an 'equal' 40%.
Do you have kids ? If so I'd be inclined to marry.

rwalker · 03/02/2022 07:09

Split should be net if lower earner wants bigger pension then the need to pay more for it.
Lower earner is 50/50 on house yet does't pay 50/50 towards it so all things considered it balances out .

Whatiswrongwithmyknee · 03/02/2022 07:19

Net though I've never understood paying as a % of earnings especially when you own the house 50/50. It's a way of joining your income but with no actual regard to the actual amount of disposable income you are left with.

Cottonfrenzie · 03/02/2022 07:32

[quote Drunkpanda]@Cottonfrenzie I'm struggling to see why you should have less disposable income than your dh, unless you both view teaching as giving you more leisure time and an easier ride than whatever his job is. That he's happy with this split is not good.[/quote]
Because it's life that some people earn more than others. And no my job is not easier than his. It's just a different job, my holiday entitlement has nothing to do with my thought process as term time I work longer hours than him.

It's absolutely fair he pays more of the bills but I don't see why I should have equal spending money. He pays enough of the bills etc that I'm not struggling. I have plenty spare. He will pay for the odd treat etc. But at the end of the day he earnt that money, I didn't.

DontKeepTheFaith · 03/02/2022 07:34

There are so many variables with pensions.

DH is in a much better scheme than me, his is mostly final salary scheme, only stopped a few years back. Mine isn’t and I took reduced hours to look after dses for many years.

None of it really matters as we share everything and I will be the beneficiary of his pension if he dies before me. He is older so likely to.

If you earn different amounts and work for different companies your pension contributions will not be the same. Not sure why they should be to be honest🤷‍♀️

HomeHomeInTheRange · 03/02/2022 07:42

The contribution of the lower earner should be calculated on what is left AFTER paying an extra pension too up.

It isn’t fair that the higher earner gets to squirrel away a significant pension savings before calculating the household contribution.

This is especially important since you are not married. The pension would not be considered in the event of a split, whereas it would in a divorce. Some pensions might not be payable to a surviving partner as they would to a widowed spouse.

This is all especially relevant if the lower earner is in that position due to caring responsibilities of shared Dc.

Cottonfrenzie · 03/02/2022 07:48

@DontKeepTheFaith

There are so many variables with pensions.

DH is in a much better scheme than me, his is mostly final salary scheme, only stopped a few years back. Mine isn’t and I took reduced hours to look after dses for many years.

None of it really matters as we share everything and I will be the beneficiary of his pension if he dies before me. He is older so likely to.

If you earn different amounts and work for different companies your pension contributions will not be the same. Not sure why they should be to be honest🤷‍♀️

I agree with this too. I suppose the issue for the OP is if they aren't married though. Although they could be a named beneficiary. Helps with death but not seperation.

I still don't think they should be the same either. Unless you have the same job/hours/company. Then that's an employer issue anyway

LethargicActress · 03/02/2022 07:53

Net.

Do you both work full time?

It’s fair enough for the higher earner to subsidise the lower earner in day to day life, but it’s not fair for the higher earner to subsidise the lower earners pension pot. If the couple stay together, the lower earner will benefit from the higher earners pension pot when the time comes anyway.

PrincessPaws · 03/02/2022 08:03

Well you wouldn't think it was particularly fair if you'd given up a highly paid job to work part time, look after the kids and do all the shitwork at home whilst your partner climbed the career ladder.

It's not mandatory to go part time if you have kids, if you are that concerned about it then probably best not to go part time

C8H10N4O2 · 03/02/2022 08:06

@FrangipaniBlue

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?!

I'm also the higher earner and I disagree with this, its far more dependent on a range of circumstances and the status of the relationship.

Where people are in long term marriages or have children then maintaining a position which equates "earns more hard cash = more worthy of reward and status as a human or family member" is an odd way to live and overall disadvantages women.

If a relationship is in the early years then the situation is different, and proportional may makes more sense but to answer the OP - pension pots are savings, its not fair for the partner with the better occupational pension provision to use that to gain further advantage over the lower earner.

You also need to consider your overall cost of living. Are you struggling to save because the higher earner wants to live the higher earning lifestyle? This is a very common pattern where the superficial equality of each partner contributing X% is a mask for the lower earning being unable to save as they are paying a percentage of a higher set of bills to suit the higher earner.

FirstTimeMum6666 · 03/02/2022 08:07

I never get couples that argue over bills, rent etc.

My partner and I share a bank account both our wages go straight into it. He works full time I work part time. I maintain the house and look after our dog and will be looking after our baby. I deal with all the bills and rent etc and pay out of our wages. We've always seen it as his wages are my wages and my wages are his. Every thing comes out of our mixed pot. We both have separate cards to the account so we can buy whatever.

lottiegarbanzo · 03/02/2022 08:15

After tax, before pension. (It doesn't look like that because pension will be deducted pre-tax but you can do the sums).

Pension is a (very profitable) personal investment.

You may or may not still be together, to benefit from paying proportionally for things, in your retirement.

Or, the lower paid person saves the same actual amount of money as the higher paid one, into a private pension, or savings account of their choice (have they used their ISA allowance already?). This won't be as profitable for them, as their employer isn't matching the extra and it's coming out of their net salary - but all the more reason for them to save more.

You need to be thinking about available income after pension and savings (any student loans too), rather than simple net pay.

PrincessPaws · 03/02/2022 08:17

*It would be more fair to combine incomes, pay out all joint costs, possibly look at some extra pension for the lower earner out of joint money, save for joint household costs like holidays, appliance replacement, property maintenance etc and split the remainder 50/50.

Of course you could consider the reasons for the earnings disparity. if the lower earner earns less simply because they're in a lower earning profession like nursing or teaching, they shouldn't be disadvantaged in a way that would be reasonable if they had chosen to work part time or not progress because they expected to be supported by the higher earning partner.*

Sorry but I disagree that what you propose is fair at all. They aren't married, there are no kids, and the higher earner is getting fleeced in this scenario. Of course they should put more into the pot for bills etc, and will most likely pay for more of the meals/holidays/maintenance etc but why should different amounts of personal spending money be an issue, they earned it. And subsiding a non spouses pension contributions? No way

As you say, sometimes there are earning disparities because of the career choices people make, but you know that when you are deciding on your career

Obviously if they get married it's slightly different, but for a DP no way should they be so heavily subsidised. They are already benefiting from 50/50 on the house when they aren't contributing 50%

Toanewstart22 · 03/02/2022 08:25

If I was arguing with my partner over this… I’d have one eye on preparing to end it tbh

DilemmaDelilah · 03/02/2022 08:28

It does seem a slightly complicated way to do it. I am the higher earners in our family. We worked out how much we needed for all expenses, including a small amount of contingency, then split it between us. DH keeps what is left of his pay as his spending money, I keep the same amount for myself and whatever is left of my pay goes into a savings account and that is what we spend on holidays, decorating, house repairs, replacement of white goods etc. We both have the same amount to spend on ourselves and everything else comes out of the joint pots.

PixiKitKat · 03/02/2022 08:30

We never factored in pensions when it came to working out bill money. We just figured out the total bills and split it. I had a workplace pension scheme, DH is self employed and doesn't have one at all!

The lower earner, if concerned about their pension, either needs to up their contributions or get a better paying job to do this. I don't think this is up the higher earner to subsidise.

My DH earns £14k less than I do, I pay an extra 100 in bills than he does and that's it. I've worked really hard for my wage increases while he kinda just bums around a bit doing part time hours. No way am I evening up our spending money when he doesn't work as much as I do. If he did work full time he'd be on a simlar wage as me but his choice not to.

PrincessPaws · 03/02/2022 08:30

Oh and in answer to OPs question, it should be based on net salary. It's not just pension that comes out of gross pay, but there is potentially a big difference in the amount of tax and NI being paid by the individuals too

RJnomore1 · 03/02/2022 08:30

Due to circumstances I’ve got a much better pension than DH and get much more employer contributions too !) but it’s not an issue, I view it as saving for our joint future it’s not like I’m stashing money away to buy myself a sports car or something to his detriment - it will find a good quality of life for us in retirement.

I find this whole thread mostly odd as a result. Pension is only an issue if you don’t intend being together when you get the benefit surely!

Also split should be on net pay. That’s the available money. You can’t penalise someone for what’s not in their hand.

BernadetteRostankowskiWolowitz · 03/02/2022 08:35

Are there or will there ever be children added to the mix?

MrKlaw · 03/02/2022 08:36

Net.

But I’m not a fan of straight percentages like this. Its too absolute. The higher earner can easily left with significantly more disposable income than the lower earner even though both are paying a ‘fair’ share. Yes they’re earning more so maybe ok, but you should then take into account non-work specific roles like all the household tasks which have value too

We mostly just pay all the bills randomly - my wife was paying some specific ones to get the cashback from Santander when they did that, but otherwise it doesn’t matter who they come from - 80% me. Ultimately the incomes end up mushed togehter. We have bills that get paid, we put aside some for the yearly stuff (car insurance etc), look at how much is left between the two of us and put a chunk in savings. That leaves us with ‘pocket money’ which is roughly equal