to not want to put money in DH pension and not mine?

[yellowcuptea]

Okay - so DH & I together 20 years, 2 kids. Have had the usual ups and downs.

DH is in highest earner bracket so puts a lot in pension as it's tax efficient. I earn about a third of what DH does. I went part-time for kids, took a hit on promotions, didn't pay into pension in maternity etc. but DH was free to go for big jobs.

DH has close to £1m in pension, I have a quarter of that. DH is now suggesting I basically drop my pension contributions to minimum, we put more of DH money in his pension, and use more of my salary to live off. More tax efficient.
Then when I'm 55 we take the 25% out of my pension that's allowed too.

AIBU that this makes me feel really uncertain?? I don't like the idea that my pension will be worth so much less! DH of course is saying, but it's OUR money at the end of the day and even if we split, pensions are a shared asset so I'd still benefit.

YABU - it's family money. Use your salary to live on and save more in DP pension

YANBU - you should both have separate pensions, and you should be paying more into yours not less...

I should add, I'm also in the 40% bracket, but don't earn as much, And yes I know we're lucky!

Not a chance I would be doing what your dh suggested

I understand your thinking. My logic would be yo reduce payments into his pension and increase payments into yours. However I'm no tax expert.

Up to you really. If you write an agreement of what you plan to do and make sure it’s properly signed it would be pretty hard to argue against if you divorce, I would have thought you’d get half his pension anyway?

Does he generally think of all money as joint money, I.e., you can both spend it how you like? If not then I wouldn’t do it, but then I wouldn’t be with someone who was controlling with money in the first place!!

Is he paying 40% or 45%?

Could that be secured in some way legally?

That won’t work. He gets won’t pay tax on the money he contributes to his pension. He’s not suggesting she physically pay into his, just he ups his contributions so say instead of getting £100 a month, he will pay £50 of that into a pension and save the tax. She then pays £50 less into her pension as the tax and they live on that as she’s not on the top tax bracket.

On the surface that doesnt sound very fair to me. Have you guys got a financial planner we have found this very useful. Basically they look at where you are now and look at what you would need to do to meet any financial goals eg retire early at 55, put kids through uni fee free, consider care costs etc

My husband and I have always earned very similar amounts but I have always been keen to retain financial independence (parents divorced and dad left my mum and so me) in a parlous state. We each have our own accounts and pay into joint account for house expenses and kids expenses. We pay in proportional to income so now he’s retired and I’m still working I pay more. My share dropped to nothing whilst on unpaid mat leave etc

The meaningful money podcast is a great source of general financial information

Absolutely not.
I would be most concerned at him wanting to do something that so goes against your best interests.
Keep your pension.
Why hasn't he topped it up as your career has taken the children hit?

With his pot close to £1m and the maximum tax free cash lump sum having been frozen, it doesn't make sense to keep adding to his pension if you are also able to get 40% tax relief in your own pension.

I’d wait to see what the October budget brings - lots of chat about changes to the pension rules, including reductions to the tax free withdrawal.

Why does he want more in his pension though? My understanding was that you lose some of the tax efficiency once it’s over 1M?

I would get proper financial advice and then set it out legally in order to bsck uo what he is saying. I wouldn’t do anything without that as I don’t understand why he thinks it kore tax efficient

Well. Does he openly share everything now? Can you make decisions on spending? Will that be the case when you’re retired? Do you have full access to ‘his’ money?

We are similar. DH can't put much more in his pension so he's going to make a lump sum contribution to mine and I think he gets the tax back on that. Or something like that - he's an accountant so he knows what he's doing!

Not a chance. I would absolutely be getting pensions advice on this one and there would have to be an incredibly good reason to do this.
How are finances otherwise split? This gives me a few financial abuse vibes. Is it typical of him to be using you money for his financial gain?

How much tax relief does he get? Is it 45% on his income.

im going to go against the grain and say that if he is getting extra tax relief - and you are happy with each other - he has a point. You still have a larger sum in your pension than most people and would be entitled to half of his in a divorce. My view would be very different if you only had 20K in your pension and then I would prioritise you building it up.

I’m less clear on why you would get 25% out of your pot rather than his. How close to retiring are you? For those sums of money I would have a budget and a financial planner so I think you would be reasonable to insist on external advice. Do you even have a purpose for the 25%? It doesn’t have to be taken out just because you can. Some people use it to pay off a mortgage for example.

Also it seems odd to use your money for most expenses rather than having a joint account.

Fuck that on many levels.

I would expect Labour to reintroduce a lifetime cap at some point so not sure it’s a great plan. Also suspect they will lower the annual cap. I’m amazed that with the annual taper anyone can get close to £1m anymore anyway!

Once you both retire and start to withdraw it makes more sense to have the pension split across two people as tax on it will be less than if it all (or vast majority) sits with one person (with a pension of that size).

But more than anything, don’t leave yourself with a shit pension. Who knows what the future holds. At the very least you need to make sure you are getting full employer contributions.

Be careful, maximum pension pot is £1.25 million, so he's getting close, depending on age. You need financial advise on what is best. I'd be happy to put in Husband's pot as long as I would get a monthly pension when it's cashed in.

Then when I'm 55 we take the 25% out of my pension that's allowed too.

On paper some of it makes sense but this bit I was 🥴 at…

is he younger or older?
is he taking 25% out of his???

Have you both went to speak to an independent financial together to discuss what's the best way forward? I wouldn't be doing this straight off his say so

Why doesn't DH top up your pension payments for the year; that's the most tax efficient because if you're not using your 40k then you're losing it.

Bet that's a big no.

Can you drop his contributions to nearly nothing and up yours to nearly 100% of your wage?

No idea on UK tax brackets etc, but if you're on the same tax rate, then try to maximise your contributions to catch up for your lost years. Tell DH it's all one pot, so increasing yours makes the most sense to get you in an even position.

It can make sense to pay more family money into the pension of whoever gets the most tax relief. My ex and I did that, paid more into his.

When we divorced we each received 50% of the total pension pot we had between us. So we both benefited because it was bigger than it would have been otherwise.

You probably need independent financial advice though because his pot is around the £1 million mark which might affect what's best.

If anything you should be paying more into yours to level things up a bit. IF anything happened between you you could be left high and dry. I think the focus should be on getting your pension back up where it needs to be so it is evenly split - maybe its time to focus on your career a bit and move that along.

I would recommend getting some pension advice as a couple as the adviser will be very even handed and stops the conflict between you two. It also helps you evaluate whether the pensions you have are any good. Mine is quite poor and it wouldn't be cost effective to transfer out to another pension - in fact adviser said I would find it difficult to do that and overall the features of it despite it being a final salary, are poor. I will be starting up payments into a new one shortly.

So he earns 3 times what you do, but he wants to 'use more of your salary to live off' and draw on your pension, not his, once that becomes an option? It may be tax efficient as anything, but it doesn't give a good vibe.