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 dont think its a problem as even if you do split, pensions would be too. I think the main issue is that he getting close to the lifetime limit, whereas you are not, so does it really make sense to max his pension. Id sit down and do the numbers on how much will really be saved by doing this, and for how long. Unless you are uncertain about your relationship, in which case its not ideal as it makes his income look smaller than what it is.

Oh no, do not put money into his at all, instead put as much as you can into yours. You never know what the future holds. If he wants to save tax payments why not look into put everything in your name?

my husband and I often tax plan as to how to best use up our allowances etc. when you are married everything is joint. It makes no difference whose name it is in. It is collective asset of the marriage. In the event of a divorce he could be made to give you a proportion of it and after 20 years that would, no doubt, be 50%

honestly I don’t live my life expecting my husband to leave me- it depends if you have suspicions that you might split up or not.

all our money planning is done based on what is best for us as a couple as our retirement is being planned as a couple.

If you both plan to be together until death do you part and you have a joint account /he isn't in control of your spending then it makes financial sense. My parents would do something like that.
I don't trust men though so I wouldn't unless I was legally protected - perhaps marriage is enough to legally protect you but you'd only 'get half ' if you actually divorced - staying married with him holding the purse strings is the difficult postition I'd be wary of

OP, there is SO much incorrect advice on this thread. I think you need to see an independent advisor because some of what is being trotted out here as fact is simply incorrect.

I get the concerns raised, but for balance - we did this. My DH had a cracking pension while I had the absolute basic. We put as much as poss into his and I retired at 55 (he’s a few years older than me). Mortgage has been paid off and we are living quite comfortably off his pension now with a decent pot in the bank.

It very much depends on the relationship though.

Keep your own pension. Not everything in a marriage has to be communal.

A word of warning, my husband said the same. I did it. We used my wages to live on and invested in his pension, as it was a better scheme. 23 years of marriage, and a divorce later, I’m screwed for a pension while he is sitting on four times what I have, with another 15 years to pay into it, while I have no means of increasing my own, working on minimum wage and supporting the children.
I never thought in a million years that it would happen to me. Make sure it doesn’t happen to you.

I don’t know if this has been mentioned because I can’t be bothered to read the comments but, what might be most tax efficient now, may not be most efficient when it comes to withdrawing. Pension income (aside from your tax free cash) is taxed, you both have an annual tax allowance so it actually makes sense to be withdrawing similar amounts from each pension pot. If your pensions are beyond what you require to live on then they can be passed to beneficiaries tax free upon death, they are also out of your estate for the purpose of inheritance tax. There is a lot to consider and I suggest you speak to a financial advisor.

You need to get independent financial advice. The income levels you are both on warrants financial planning. We are similar although I am just in to the 40% and hubby is in the 45% and our advisor is very good at how to be more tax efficient with your cash and assets. There is sense in what your husband is suggesting but in the same hand it’s scary as it looks like you are handing over your hard earned pension.

Warning: I am currently NOW where you could be if you do as he asks! My hubby said same, we threw all money in his pot, I now have £14k pension pot and almost 60, and he has married someone else, I am now high and dry, please please please DO NOT do it and be in my shoes, scared to death about retiring with no pension

? Then it’s not more tax efficient at all.

If you're both higher rate tax payers then it's not more efficient to pay into his? There's an annual 60k cap? Surely paying into yours makes more sense

Yes, should be maxing out your pension as he is approaching the cap and you’re in the same tax bracket.

All other things bring equal if you paid more into your pension every month (as both an employee and higher rate tax payer) would those payments not take you below the 40 pct tax band threshold (seeing as pension payments come off your salary first) and hence be more tax efficient for you?
As PPs have said, you have missing years to make up and it is usually well worthwhile to pay in extra to make up for any shortfall from prior tax years.
(edits typos)

I take it you are referring to his work pension? He can always start a separate SIPP and get tax relief on that.

Hmmm we do this. In fact we were advised to by our financial advisor! I did ask him what would happen if we got divorced and he said as pensions are a marital asset they get split equally.

YANBU.

If anything, DH should be putting money in to yours now to ensure you’re well provided for in old age.

Build yours up and prioritise it.

I wouldn’t do anything until the budget as you might need to re-assess then anyway.

On the face of it, it would be worth looking at your marginal tax rate and his marginal tax rate plus employer contributions. If your were at an equal share it may well make sense to divert into the higher earner’s pension.

but… you also have to look at tax out. He’s going to be at the max tax free lump sum and with a pot of £1m already most likely getting far beyond that at retirement. If he’s going to be paying 40% on drawdown then there doesn’t seem to be that much benefit on paying heavily into his. Equalising would mean you can max the tax free lump sum on your side and take a more equal amount out each possibly never paying 40% tax on the way out.

The care home point was also interesting to read about and is certainly something that makes having more equal pots valuable even if that comes at the expense of some tax efficiency.

Yes. It does. In a divorce you have to itemise all your assets whether joint or not and then the court will determine a fair split.

There is so much incorrect information on this thread.

There is no lifetime allowance anymore and when there was it was £1,074M rather than £1,250M that has been quoted. You are allowed £60k personal annual pension contribution and not £40K (yes RR could change this in the upcoming budget but let's wait and see).

If you are both 40% tax payers it makes just as much sense to pay a maximum into both of your pensions rather than just his and you could put in £120K per annum between the two of you rather than max his and only have a limit of £60K per annum. Also when you come to take out tax free amounts, he is almost at the limit of tax free out of £268K so once he has reached that there is no more, but if your pot is building up you could also get to a point where you can also take out £268K tax free (again RR could lower the limit on the maximum tax free allowed out, in which case it makes more sense to put into yours and get yours up rather than keep paying into his).

I would have 30 mins with an IFA before doing anything and I would wait another week or so until RR has delivered her budget and then make decisions.

The allowance does reduce to £40k pa for high earners. Another reason why further squeezes for the biggest tax contributors won't raise much. The well is already tapped dry.

It can taper to start to taper once an individual earns £260,000 by £1 for every £2 above and can taper as low as £10,000. So you’d be correct if the DH earned exactly £300,000. Otherwise, wrong. A stopped clock is right twice a day I suppose. To be fair, the annual allowance was £40,000 until recently.

Also, carry forward may allow higher contribution if peters earnings and unused contributions allowance.

Op, listen to @Loubilou23 and myself - see a decent IFA, but avoid SJP.

He sounds very controlling

And what happens if you divorce. Always work on that basis to make a financial decision. Don’t leave yourself vulnerable. You never know whet the future holds.