Pension

[Underpressure22]

DH and I (early 40s) have been together for five years and have a three year old DS. When DS was a year old, DH lost his advertising job and has been a stay at home dad ever since (although DS attends nursery 3 days a week). DH could not find another job, but very luckily I am a solicitor and am (just about) able to support us. DH has been slow to find new job but eventually switched tack to be a tutor, although no work yet.
the last two years have been tight because we got screwed on mortgage rates and about 60% of our income goes on those repayments.
The issue is this. My MIL (widowed, very comfortable), has suddenly announced that she wants to give DH a significant sum of money. But “it has to be for his pension, it can’t be on the house, or anything frivolous”.
I have a small pension of about half the amount she wants to give. (I don’t get a workplace one, long story.) I have been paying for everything for two years most significantly the mortgage, which is on a joint tenancy basis (ie sharing all with him). If we could pay a bit more off of the capital, it would be amazing. But he thinks he needs to tell his mother exactly what we do with it and/or respect her wishes about the money.
am I unreasonable to be upset that:

1. his mother is dictating what her 40 year son does with money (he doesn’t see a problem with this…)
2. neither of them has acknowledged my contributions to shared finances, and the fact that I won’t ever get anything like that from my own family. I feel as they think, oh, she’s got a good job, she’s fine. Well - yes but I have to work really hard for it and I have no spare money because he hasn’t worked for two years. The idea that he will have more saved in a pension than me is really upsetting. Am I being unreasonable? ps I really like my MIL, I think she thinks she’s helping.

I guess she thinks that him putting it to a pension is safer than spending it on the house etc. I get that - she’s thinking of him in his older years given he’s not been working and paying into a pension. He is her priority, not you.

That said, it’s rubbish your hard graft isn’t being acknowledged. I’d say put the some to the mortgage and some to his pension. You are married though so you should both mutually benefit from how the money is used.

YANBU. Your finances need to work so that you are both in the same position.

It’s her money. He has two choices, he can do with it as she wishes or he can refuse it. It’s up to him.

As he isn't working the amount he can contribute is very limited.

Unfortunately I don't think you get much choice to just accept it. However the fact that he hasn't bothered to make much effort to work and putting it all on you at the detriment of your own pension shows me how little he actually cares for you and your contributions to the household.

Bear in mind, if she dies within 7 years that there will be iht to pay or if she needs care, it could be clawed back. I don’t know how old she is, but worth taking into account

I’m sorry but I’d accept the money then do WTH I like with it. MIL doesn’t need to know. Your husband needs to contribute to mortgage and bills and if this is the only way he can do this then he has to sacrifice the money and not stash it away in his own pension. Does MIL know the extent of your contributions over the years?

Ultimately she’s his mother, not yours and she obviously feels strongly that she wants to help to make sure he’s not destitute in later years. It will benefit you both, and if she puts in a big chunk now it will have plenty of time to grow and you’ll be relieved in years to come that you were given this gift.

And being blunt, god forbid if you ever divorce you’ll get half of it.

More tax efficient to spend that money on mortgage & other bills and for you to up your pension contributions. You’re married so your pension is shared anyway including divorce. He can make a certain level of payments and gain a tax advantage too.

If you’re married then it’s joint money right. There’s no such thing as his or yours. And surely if you’re working it’s better to put it in YOUR PENSION because then you’ll get (I’m assuming you’re top rate) 40% back on it. Up to a certain amount. And it would almost certainly be better to drip feed it into a pension not do a lump sum. So hold some back to do the maximum amount for next year as well.

obviously depends how much you’re talking but I would do some research and come up with the most tax efficient plan for your joint money. After all you’re a partnership. Get DH on board with it. Whether you tell MIL or not exactly what you’re doing with (what was) her money is up to him. But approach from the angle that you’re investing it in the intent it was given even if not strictly the letter.

if you are going to drip feed into a pension can you get an offset mortgage in the meantime

She knows I’ve been paying for everything and both she and I worked together to help him to do his career pivot. He doesn’t want to take the money and not be completely honest.

She’s not wrong about him needing a pension. Yours might not be a big one but it’s not a zero sum game. Your both don’t need to lose out.

The problem here is that he is a lazy freeloader and needs to get a job. Any job. Or does he think he’s too precious to work in a supermarket?

The Pension money is a red herring, stop facilitating him staying at home and not work.

And no, SAHP is not work. For a woman or a man.

It’s her money, she gets to do what she wants with it, and I don’t agree with deceiving her. I believe the options are 1) take the money and DH puts it in his pension or 2) don’t take the money. Out of those two I would go for the first one.
He is her DS, of course she is more inclined to look out for him than for you.

If DH is not working then he will be restricted to £3600 this year as the amount he can actually contribute to a pension

This. If you are a non tax payer you can only contribute £2880 per year to a pension. This is £3600 gross. He needs to be very careful not to put in more than this whilst not working otherwise he will create a big tax liability for himself.

The benefits of a pension is the tax savings - if he’s not working there are none

does he actually do most of the domestic labour or (as I suspect is the case) jot…

The annual allowance can be carried forward for up to three years.

He really does most of the domestic stuff. I just put the laundry on. He does all the food, pick ups, early mornings with our son, takes care of house, plus two full days with toddler. It has actually been a godsend for my job because I never have to worry about working late etc. I keep trying to flip genders - if I were the SAHM and my parent gave me particular money for my pension would it feel as unfair?

That is a really good point, thank you. I didn’t know that.

Lots of people view their house as a pension pot, buy a family house, pay off mortgage and when you get to retirement age you sell up and buy something smaller/something in a cheaper area.

If you were a SAHM the MN collective would be saying he should be contributing to a pension for you.

Would you say that about a SAHM?

I completely agree with you, but ultimately you can’t control his relationship with his mother and if he decides that she needs to know exactly what he’s spent the money on there’s not much you can do.

However I think this is the point to start insisting that he brings in more money. If he isn’t earning any money tutoring then he can’t call himself a tutor, he’s just unemployed and needs to get a job - any job - to contribute to the family. At 3, presumably your DC is now getting some free childcare hours and it’s not long until they’ll be at school so he’s really got no excuse.

There’s nothing wrong with having a SAHP if you can afford it, but if you’re financially struggling then everyone needs to bring in as much money as they reasonably can.

he needs to get off his arse and get a bloody job to start paying his way or take the mo way and just use it for coping with expenses.

Just another viewpoint, for some people it was beneficial to draw down money from a private pension at 55 (changing shortly to 57) to pay off any outstanding mortgage and then pay what would have been your mortgage payments back into the pension pot.

I think it would be advisable to see a financial advisor especially considering neither of you knew about the limits on a non-tax payer paying into a pension pot and you probably being a higher rate taxpayer would get more benefit from the money in your pension.