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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

AIBU for sacking off pension contributions in anticipation of large inheritance?

108 replies

minormajor · 27/05/2025 22:11

If you knew you would be getting a large (c.£1m) inheritance, would you bother paying into a pension at all or prioritising retirement savings if you are on a lowish income?

Dh & I are 52, both self employed ticking along nicely but far from flush and didn’t start paying into a pension until our 40’s & even then minimal amount as that’s all we could afford.
Our kids are older: one at uni one working/training so we’ve both taken on more work and finally in a position to save so naturally thinking about increasing our pension contributions.

Parents are 80 & 81 in pretty good health and I have a sibling who would be joint beneficiary. Inheritance could be 15/20 years off if parents live as long as their parents did and I’ve accounted for IHT and potential care home fees on the £1m estimate. No inheritance on DH’s side.

AIBU : make your own retirement provisions don’t rely on inheritance or
YANBU there’s a decent inheritance coming your way so no need to prioritise your pension

OP posts:
EmeraldRoulette · 27/05/2025 22:13

They might live well into their 90s and need a care home. Are you familiar with the costs?

i'm guessing you have other savings. Hopefully you aren't talking about just spending all your money willy-nilly in case you get an inheritance.

Thelonelydonkey · 27/05/2025 22:15

Do you know that they haven't left everything to cats' protection?

WheresMyPlanetGone · 27/05/2025 22:15

EmeraldRoulette · 27/05/2025 22:13

They might live well into their 90s and need a care home. Are you familiar with the costs?

i'm guessing you have other savings. Hopefully you aren't talking about just spending all your money willy-nilly in case you get an inheritance.

The OP said she’s aware that her parents could live for another 15-20 years and that she’s accounted for care home costs in her OP.
I don’t think I could bring myself to rely on it completely OP, you never know what will happen. I’d be making my own provision regardless.

Whiteflowerscreed · 27/05/2025 22:15

YABU nothing in life is guaranteed

Mischance · 27/05/2025 22:17

Sounds somewhat crazy to me!

Nursing homes hoover up funds, including value of house when ready cash dwindles.

I am afraid you will just have to keep paying in .......

AlohaRose · 27/05/2025 22:17

I'm not sure what you mean by having accounted for care home fees in your estimate of any inheritance? Heaven forbid anything should happen to either of your parents any time soon but one of them could have a catastrophic health incident next month and end up in a care home for a decade. If the total estate is worth £1m than it's all eaten up on looking after that parent. Even if you mean that you estimate £1 million left after care home fees, there's no way of knowing how long a parent could be in a home or possibly both parents. I think you would be very foolish not to continue to make the maximum pension payments which you can reasonably afford.

MidnightPatrol · 27/05/2025 22:17

I fear there’s a lot of people out there who have earmarked their parents assets as their future meal ticket, which are going to be very disappointed.

A high-risk strategy from you IMO. And - if your parents are going to leave you £500k, is that not better off helping your children out with homes etc?

You have spare money to save, so do so. Save it in ISAs if you don’t want the limitations of a pension on it.

x2boys · 27/05/2025 22:17

Thelonelydonkey · 27/05/2025 22:15

Do you know that they haven't left everything to cats' protection?

I assume the Op knows what's in their parents will ,my parents have told me exactly how their will is laid out.

VWT5 · 27/05/2025 22:19

Care home costs at current rates at 2k per person per week.
1 person = c. 100k per annum
2 people = c. 200k per annum
x 5 years
= 1 million

EmeraldRoulette · 27/05/2025 22:19

@WheresMyPlanetGone I meant specifically does she know what the fees are

On the Elderly Parents board, there do seem to be regular posts from people who are shocked. I think some people have a figure in their head, but it may not add up with what happens when it comes to it.

By the way, where has your planet gone? 😂 excellent username.

soupyspoon · 27/05/2025 22:20

I suppose if you calculate that if they both needed care, from tomorrow, for the next 20 years and that leaves you and your sibling 500k each still, then you might have a point. What cost per month are you guesstimating on?

SpikyCelia · 27/05/2025 22:20

Don't count your chickens, etc, etc, comes to mind!

Ps34 · 27/05/2025 22:21

I would personally carry on contributing to the pension until you receive your inheritance and know how you have got. As someone else said the inheritance could deminish with care costs for your parents and with the joint beneficiary factor.

Original poster
minormajor · 27/05/2025 22:21

The post title was a touch misleading - we will continue paying our current pension contributions (5% each so not much!) but we are conscious they are very small pots so if there were no potential inheritance, we would be tightening our belts and ploughing any surplus income into pension. It’s this extra money I’m not sure about because of inheritance as keeping it would mean an annual holiday, building up a rainy day/emergency fund etc

OP posts:
Superstar22 · 27/05/2025 22:29

I wouldn’t and I am not ploughing extra money into pensions for the reasons you’ve given and I am not quite 40 yet.

I will pay the usual into the decent pensions we have had for 20 yrs (public sector pensions for both of us) but can’t bear to put the “extra holiday/ kids uni fund” money into pensions when I know I’m getting an inheritance in the next 20 years ie before I retire.

yes it’s a risk but no cats homes are in the will, I’ve seen the will, it won’t change and yes care home fees may take a lot, but I’d still have an inheritance so I would prefer to live nicely now. Retirement is not promised, which I have sadly learnt hence knowing inheritances are coming.

Original poster
minormajor · 27/05/2025 22:30

Estate is worth c£4m now so my £1m estimate is very crude and accounting for IHT and sizeable care fees. Of course this could diminish further if there was a major accident or they both suddenly needed care home for 20 years but it’s likely to all disappear. Grandchildren are well looked after in a separate trust with more than enough for a generous house deposit.

OP posts:
soupyspoon · 27/05/2025 22:32

minormajor · 27/05/2025 22:30

Estate is worth c£4m now so my £1m estimate is very crude and accounting for IHT and sizeable care fees. Of course this could diminish further if there was a major accident or they both suddenly needed care home for 20 years but it’s likely to all disappear. Grandchildren are well looked after in a separate trust with more than enough for a generous house deposit.

How is the IHT going to be paid, HRMC usually want it up front or at least some on account.

Whattodo121 · 27/05/2025 22:34

We’re a bit younger than you, and potentially going to inherit large amounts from DH’s side of the family at some point (who knows if or when?!) We also know from prior experience that there are no guarantees. However we both have very good public sector pensions and have done all the financial planning to be able to pay off our mortgage by retirement and will have a decent pension to live off regardless. What we are doing now though is having nice holidays and not prioritising overpaying our mortgage. I want to do fun stuff, life is short.

Owmyelbow · 27/05/2025 22:38

My grandad got dementia fell out with my dad, wrote him out of his will, then got diagnosed with dementia. They fell out when my dad tried to tell him he thought he might have dementia. People told my dad he could challenge the will but it might not got anywhere. He chose not to when my grandad died. My uncle who'd moved abroad and not seen him for a decade and an animal charity got all the money. Which was a fair amount. Don't assume you'll get anything

TheFunHare · 27/05/2025 22:39

Sorry but I don't think that's nice. Your parents have presumably worked hard all their life with the idea of passing something down. If that comes to pass (and as others have said that's a big if!) wouldn't you want the opportunity to benefit your children if you don't need it? I've seen my parents scrimp and save their whole life just to have some kind of legacy. I love the idea of that going towards a house for their grandchildren. Also enjoy your parents whilst they are still here rather than counting your inheritance. Unless they've been shitty parents in which case crack on.....

Bananafofana · 27/05/2025 22:40

Hard to say without knowing what your pension fund is now - eg is it just a few thousand pounds? As £1m inheritance might feel like a lot of money but it’s the size of some people’s combined pension savings and it will give a couple a “moderately comfortable” retirement for 25 years. Have a look at the various calculators available. You could be a long time retired ….

ClareBlue · 27/05/2025 22:41

If your mum dies before your dad he will definitely remarry at 40 something Eastern European women. Where's that going to leave you?

Winter2020 · 27/05/2025 22:42

One way people don't see an inheritance is if one parent dies leaving everything to their spouse and they go on to remarry and then predecease the new spouse.

MyNamedoesntWork · 27/05/2025 22:43

minormajor · 27/05/2025 22:11

If you knew you would be getting a large (c.£1m) inheritance, would you bother paying into a pension at all or prioritising retirement savings if you are on a lowish income?

Dh & I are 52, both self employed ticking along nicely but far from flush and didn’t start paying into a pension until our 40’s & even then minimal amount as that’s all we could afford.
Our kids are older: one at uni one working/training so we’ve both taken on more work and finally in a position to save so naturally thinking about increasing our pension contributions.

Parents are 80 & 81 in pretty good health and I have a sibling who would be joint beneficiary. Inheritance could be 15/20 years off if parents live as long as their parents did and I’ve accounted for IHT and potential care home fees on the £1m estimate. No inheritance on DH’s side.

AIBU : make your own retirement provisions don’t rely on inheritance or
YANBU there’s a decent inheritance coming your way so no need to prioritise your pension

You are relying on the fact that you will receive an inheritance, I see many disappointed kids who didn’t get what they expected (I deal with wills and estate administration).
Plan for your retirement yourself and treat any inheritance as a bonus would be my advice.

EggnogNoggin · 27/05/2025 22:43

Save yourself.

Noone knows what government policy will be in 20 years time.