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.

No…she would have birthed HIS children, looked after HIS children so that HE could progress in HIS career, then further advised to send him a bill for cooking, cleaning, mental load, life admin….

Can he speak to her and suggest that he puts the max he can to his pension and use the rest to clear down the mortgage. That should allow you to up your pension contributions.

Either way at the end of the day your family is better off. While you acknowledge the benefits of a SAHD you can also see the downside of having the whole of the financial burden on you. Do you see your husband getting a new job in the near future?

Yup. I’m guessing your MIL isn’t aware of this.

He can put it in over a few years, up to the amount he is earning. But I do feel some should go towards reducing the mortgage, for 2 reasons.

1. there is no point struggling massively now to save for retirement. And I say that as someone who does prioritise saving for retirement.

2. you have supported him. It does seem fair to take the pressure off you for a bit hy him contributing to family life now.

Yes.

You should be contributing for him.

Isn't this just saving.you the cash?

But if he is just freeloading I guess it's up to you how you deal with this within your relationship.

Does she know you have provided so much financially to support your family already? I completely understand your perspective and would want the money to pay off chunk of mortgage to support you all as a family.

I don’t understand why he cannot work in any capacity either.

Let him put the maximum in, then the rest into the mortgage. When child starts school, put the money saved from nursery into your pension. If he wants a pension , he can get work when child is in school.MIL being kind to him, but you are a team and money should work for the whole family, especially if you are paying for his life

My job is really unpredictable with long hours. We did not want to have both of us out of the house just to pay for a nanny. It’s been amazing for DS to have this dad time, they are a fabulous little team. But now DS is having more time at nursery, DH will be working from now on (he only joined agencies last month).

This isn't what you asked...but if you were working make sure the NI contribution associated with child benefit are transferred to him. It makes a difference to his state pension Income.

Also look to buy in partial and additional years if he has any... It is a relatively cheap way to improve his retirement income.

I also think that if you split up his pension / savings accumulated while you are together are considered a marital asset... As is the house equity and any savings either of you have. It may not be as big a deal financially as they are thinking. Someone with more knowledge please correct me if this isn't right.

Is that right? Surely the amount of bonus tax relief you can earn is limited as they treat it has if you had paid tax on 3,600 even if you haven't, however, you can still pay in as much as you like. Not getting tax relief is not the same as getting a tax bill. If the money is given in a way that doesn't attract inheritance tax I can't see what the issue is.

Assuming you are in it for the long term you will still benefit from the pension.

Your pensions are shared between you, either in retirement together or if you divorce. So if he doesn't have much pension, you'd end up having to subsidise him in retirement as in work life. I'd see it as a good thing that as a couple you have more resources in older age and you can perhaps retire earlier than planned.

However, as pp have said, it's not as simple as putting in a lump sum. You should see a financial advisor/wealth manager. They will explain the most tax efficient ways of receiving this money, including option of paying some off mortgage etc., risk of IHT and so on. Then DH can put that to MIL and ideally the advisor talk her through the best option as well.
IME she will listen to the professional and take on board advice.

She is giving him a gift for a reason, and not unreasonable for a mother to want their child to be comfortable in later life and giving them the money to spend now would give them an excuse to not go to more effort to find full time work. Additionally I don't think this has anything to do with you. Her gift and you financial and family circumstances are nothing to do with each other.

I guess MIL is coming upto pension age and realising how important pension and wants to help build something long term and help secure your future

If you were a SAHM the MN collective would be saying he should be contributing to a pension for you
Exactly that! When a poster dares to say that MN is biased against men, everyone screams that that's not true. Then comes along a pist such as this one and suddenly the man is a freeloader when posts after posts about sahm make a point that she works as hard as he does, that he should contributes towards her pension and that if she gets inheritance money, she should make sure to protect it, because its her money from her parents.

In your case OP, you have a short marriage still and there seems to be some issues developing. Its totally understandable that this mum wants to protect her own son in case you decided to go tour own way tomorrow.

Him paying towards the mortgage and bills is a totally different matter. If things were the other way around, posters would say that you wouldn't be able to hold your job and income if ut wasn't for your husband taking care of your child and house.

If it is important for you to have more a share of all the duties, then you need to discuss how that would work. He takes on some working hours, you take on more care of your child and home.

Absolutely not. A SAHM mum looks after the children. OP said in her first post that her child still goes to nursery three days a week. With one parent working then even with some free hours she is still paying out for childcare whilst DH is sat at home. Regardless of male or female if the other person has lost a job then they either revert to being a full SAHP or they find whatever job/s they can until they find something more suitable.

I’d suggest you both have a sit down and evaluate the money as a lump without stipulations, and optimise that vs your circumstances and the what-ifs of inheritance.

It could be that a lump off your mortgage frees up your future savings (incl into pension), reduces your hours for more work-life balance etc. Or you might want to top up Junior/your ISAa, pension pots (across your shared allowances). Has your DH paid his stamp during his years out of work?

Your MiL sounds very kind and like she wants to do the best thing for your family. Proposing a good alternative option, which shows how it helps you all beat today and in future, would be well received. (I personally wouldn’t go into this detail but it sounds like doing so is important to DH).

If you are married, pensions are a joint asset so he would be sharing yours and you his anyway so you still benefit

Maybe his mum thinks this money is safe in a divorce for just him but actually currently if you divorce your splitting your small pension, so it actually is better for you.

However, yes there are rules about how mu h pension you can do when unemployed and the financial advisor with the best way to do it seems sensible

I also have to work weekends, and he does all of it. And nursery is really good, especially for an only child.

She can gift or not gift it how she feels.

Shes said to her DS I have some money id like to add to your it to your pension. His options are, accept it, decline or maybe say mum tbh if I could put it towards the mortgage that would make a massive difference and see what she says.

I dont really like gifts with strings but shes been clear in advance that shed like to use some money for his pension. And he either wants it for that or he doesnt

Got to love all the MN man-haters saying he should go out and get a job, contribute more to the finances, etc.

I 100% guarantee they would not be giving the same advice to a SAHM.

On a separate matter, it makes no difference who the money goes to, if you split the pensions are part the assets and would be split accordingly. As others have said, it makes much more sense for you to make the contributions for tax reasons, pointless for him to make them.

Why arent you just g r e a t f u l , most folk dont get a penny farthing inheritance xx

It’s so weird when the situation is reversed. But I think that’s also why I wanted to ask why it felt odd to be sole earner and upset that he had back up that I don’t.

If someone is giving you money for a specific purpose then you should either respect that or not accept the money. She wants to give him money for his pension. So that’s what he should do with it. She doesn’t want to give you money to pay off your mortgage and that’s her prerogative.

You do need to check how much he can put into a pension as that’s limited to the amount he’s earned in a tax year.

Also bear in mind it’s good to have your pensions around the same, as you don’t want all your income in retirement coming from one person as this could result in you being taxed more than if it were more equal.

You also need to think about the fact it seems you have as a couple very little pension provision at the moment. This gift could mean you both have to worry a bit less about what you are going to live on in retirement. In addition you are thinking of this as his money but if you errs to divorce any money in a pension pot is part of marital assets and could potentially be transferred to you that were deemed fair/appropriate when looking at overall assets.

And as your income is jointly shared now, any income he has in retirement will be jointly shared. It’s swings and roundabouts. So I think you should be thinking, great we have more money saved for our retirement, not feeling resentful that he has savings. It’s joint money.

I don’t think you can dictate where gift money is spent . As hard as it is now you’ll be grateful of a pension later on . As you’re in your 40’s retirement will be here quicker than the blink of an eye

If DS is going to nursery 3 days a week, a parent of either sex should be looking for at least part time work, especially if the family needs the money, which this one does as the OP says their mortgage has gone up so they are just meeting their costs, plus it sounds like they could use extra income to improve their position, top up both their pensions, overpay the mortgage, put savings by for big purchases and an emergency fund, and also be able to spend a bit more freely.

Even if he manages 10-15 hours a week at NMW, it will significantly increase their disposable income and he won't pay income tax or NI.