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...

You're welcome. The other thing to point out too is that if you do not receive an income from employment you are limited to a contribution of £3600 gross / £2880 net p.a. in your name, so if you are considering a lump sum greater than this, you will be limited to what you can do in your own name.

I thought if your spouse does you get the pension as part of the estate, is that not the case???

No. He can specify beneficiaries and the pension scheme can allocate according to that

or he can give it to someone else via his will

Even if you are in his will, wills can easily be changed and you would have no way of knowing

Nope.No.Non.

You should get independent financial advice at this point and then talk with your husband after that. If you would like the recommendation of a thoroughly decent chap who’s not gone into financial planning for the money but to help people then message me. (Not affiliated in the slightest with them, I’m just impressed with them and they’re much better than say SJP as they’re an independent)

My knee jerk would be to build your pension pot but I don’t know the ins and outs of your finances, relationship and his pension should he pass before you (does it get reduced for example?)

No. Don't do this. If you split up this will be messy. Plus what happens if he passes away early into retirement? You won't be paid all of his pension monthly, although you may get some widows pension, depending on scheme rules.

A lot would depend on how he is with money in general?

Does it all go into one pot, bills come out and the reminder is split 50/50? That's how it should be, you should both have the same disposal money each month. If the answer is a yes and you're confident it will remain like that then yes if it's more tax efficient. If he doesn't have this attitude towards money and you, then it's a big fat Hell No, because he'll just continue to give himself more money and you'll be left with even less

You need to ensure you're a beneficiary if he does for his pension. If you divorce his pension pot goes into the marital asset pot.

@yellowcuptea I don't think your DH is thinking about the long term appropriately. I would not be too worried about the impact of divorce because the pension pots in your circumstances would probably be equalised anyway. However, whilst it might be more tax efficient to save into his pension now, it would be much more tax efficient to have a reasonable pension pot each on retirement. If everything pays out from his pension then he will pay a lot of income tax on it whereas if you each have a decent sized pot, then you can both fully utilise your personal allowances.

That said, if he was planning to take the 25% tax free lump sum from his pension and buying another pension in your name with that, then that could be quite a good idea. However, do bear in mind that the tax rules on pensions could well change before then.

Not sure if this would alter your husbands way of thinking about drawing your pension early,
As of April 2028, the age of drawing pension early goes from 55 to 57!
Not sure what age you are

Your husband has close to 1 million. This will only increase with time. The labour government seem very likely to put back the cap on pension savings that the Conservatives took off. With the cap in place, your husband’s idea does not seem like a wise move. It is much better in a marriage if savings and investments are shared out. Not only in case of divorce but in case one of the couple died early and unexpected.

This. Really bad vibe. Get proper financial advice.

I'd say no, any extra money should go into your pension to even things up so that you are independently secure in retirement. My Dad went into a care home and all his state pension and half his small private pension went on care home fees and was topped up by the council. He and my Mum had lived on their income fine before but after this she had to start claiming pension credit.

Whilst obviously you won't be in that position, are you relying on his pension for a certain standard of living in retirement?

The comments on this thread exemplify why you don’t go to MN for financial advice. Listen to @Everanewbie (and ignore everyone else) and go with your own initial idea to get proper financial advice.

Pensions are marital assets. They can be split in the event of a divorce & the beneficiary will be informed with a court order so no withdrawals can occur until the other person has received their share. It’s one of the easiest assets to lockdown legally. The issue is that many women don’t take legal advice from the beginning.

I am the higher earner in our marriage and pay tax at a higher rate than DH. I pay the pension contributions into my pension fund effectively on behalf of both of us. We have no plans to split but if we did the total pot would be shared equally. The only situation where I would be concerned about this is if you had not been married a long time where the presumption of an equal split of marital assets might not apply. See an IFA and get advice. They will almost certainly advise you to do what DH says.

Absolutely do not do this.

For heaven’s sake look after your own pension first!

Pension sharing is not that straightforward (just saying for a friend)

And governments tit about with pension rules and Rachel may well do away with pension breaks for top rate payers.

This is false information. Pension providers never guarantee to pay out to nominated beneficiaries. In many cases they even refuse to pay out to anyone who isn’t a blood relative / spouse unless said relatives contact them even if there is a will. So OP needs to check the rules for the scheme.

You might in theory be entitled to all sorts of things if you split but then reality comes home and it sounds like he could afford a more expensive lawyer than you 😏

Up your contributions into your pension, even if it's not the most tax efficient way for a couple to do it. Fuck taking 25% of yours before 25% of his! You've shouldered the financial losses from being female, and having kids. When it comes to drawing it, it won't be "efficient" (in terms of value) to protect his pension for you if he dies first, so don't be naive. Do not let him leave you in an even worse personal financial position!

I'm pretty sure pensions don't come into things when it comes to a will - it's not part of the estate. You need to name the beneficiaries in the event of death directly with the pension provider. And you can change them at any time...

Don't rely on a will that says 'I leave everything to my spouse' to include a pension, as I'm fairly sure that's not how it works.

I would advise caution too.

It’s amazing how these little agreements and “oh it’s our money” are forgotten by men in the event of a divorce…

Under current rules (subject to change in the Autumn budget) if he earns over £100k there is an argument to be doing pension contributions through salary sacrifice to try and get him under the £100k bracket. But he will be limited to £60k a year anyway.

There is no lifetime allowance currently but there is a Lump Sum Allowance which he is going to be very close to maxing out on. If I was you I'd start focussing on your pension and accruing this as being more tax efficient. He can look at alternative investments for tax relief potentially.

He'll be paying 60% tax on anything between 100 - 125K so it does make tax sense but I'd feel weird about it too

Oh god no!
yeah it’s “our money” now, until it isn’t ! If you split - and people do , you’ll not see half of what he has stashed away.

Consider what happens if dh predeceases you and your share of his pension is only half the annual amount he received when alive? This could have a serious effect on your lifestyle. Much better to have your own pension.