DH to pay off mortgage then stop house bill contributions

[Luannaa]

DH will take early retirement at the end of the year from a job he has worked very very hard in and made a huge difference to people’s lives and it has also taken its toll on him with things he has had to witness- hence earlier retirement.

This will give him enough money to pay off our joint mortgage which he wants to do so we can be mortgage free. I am extremely grateful for this as it’s huge security for the future and our dc.

However DH then doesn’t want to go into any work for at least a year, for his hobbies his small pension will see him through but this means he cannot pay anything towards the weekly/ monthly bills.

As it stands we combine £1k per month for all joint and household bills, one of these being the £900 mortgage.
With that gone, technically he doesn’t need to contribute any more as he has paid his bit but I feel a bit miffed to carry on working 40+ hours a week and sometimes overtime while he has no job, no bills to pay and just enjoys his hobbies (they are free/ low cost).

AIBU?

Please share your opinions and be honest as I want to get this right for us both.

Erm... maybe him unilaterally deciding to stop work and leave the OP with increased expenses, all the mental load of finding money to juggle expenses and still having to do the morning school run because he CBA???

Good questions. I'd also look now at whether he could stay with his current employer but in a role other than the active service he's been doing, on a part time basis.

The lump sum has been taken from his pension. They each own 50% of each other's pensions. So 50% of that sum is hers. In addition, a lump sum doesn't come out of nowhere, it reduces the amount of pension paid. And since half that pension was hers, he's reduced her retirement income for the rest of her life!

Half his pension isn’t “hers”. I don’t own half my bloke’s pension and have no claim on it until he’s dead.

You do. If you were to divorce, half his pension belongs to you and half of yours belongs to him.

I'm not sure that's technically true. If they divorced then their pensions would be taken into account when dividing the assets, but whilst they're married I don't believe OP has any legal say over her DH's pension. They each 'own' their own pensions. They don't have shared finances either.

A few years ago if you reached your max lifetime pension allowance and an employer insisted on continuing to pay into your pension despite this, then it cost you money - more money than they had put in. So you were better off with no pension contribution.

You might recall lots of doctors refused to work because of this and they changed the rule.

Exactly, unless he dies or you divorce and it's awarded as part of the settlement, his pension is his.

At the end of the day he's trying to have his cake and eat it too. If he wanted to retire early at 55 he should have got married in his 20s, had his kids by the time he was in his early 30s so they'd be all grown up and moving out around now, so the couple could consider downsizing. He also could have squirreled money away when younger so he had a decent pension available at 55 that paid enough for him to live on.

He didn't do any of this though. He chose to have his footloose and fancy free years in his 20s and 30s, spending what he earned, saving the minimum, then married someone younger than him and had DC later in life. He can't have an easy early retirement now, there's too many expenses left to pay, due to his lifestyle choices.

A spouse doesn’t automatically own any part of a pension. On divorce, a pension can be shared but it’s not automatically 50%, it depends on the wider financial picture. On death, pensions don’t automatically go to a spouse either; they’re paid to the nominated beneficiary or decided by the trustees if no nomination exists.

I think if I knew him to be capable of getting any job paying about £30 k after his fun year was up, that the sabbatical year would be used fruitfully, that much of the domestic load would be taken off me and that he'd be careful financially, I'd be happy with that. If his track record indicated that he's prone to laziness, lacks motivation without structure, has a wondering eye, and will end up sitting on the sofa in front of the TV all day, I'd be very concerned.

I think you also need to look ahead to when you are 68 and able to retire on your SP. Your DH will be 75 by then and one or other of you might not be in the best of health. Talk with your DH now about retirement plans, projected income, where you want to live (downsizing?), how you ideally would like to spend your retirement years and what provisions you can make now to ensure you are as future-proofed as you can be.

You can talk to PensionWise (google them) for free and they will offer guidance and advice around retirement and pensions. You may see a way to enabling your DH's year off without compromising the pension that could make the difference between the 2 of you having a comfortable old age vs one of hardship.

Many of these arguments would equally apply to a pregnant woman giving up work. What if the roof leaks, what about pensions, is it fair for the man not to have takeaways anymore? On this basis every woman having a baby should immediately go back to full time work.
Their arrangement is they pay 50:50 and if he’s still paying his fair share and as a sahp is supporting her to work by doing his share childcare and chores then what’s the problem?

@MistyMountainTop

If she had DF pension and could retire at 51, she must have reached the limit which back then was around £1.5M.

Drs behaved as if they were the only ones whose pots had reached the limit - they weren't. I know family personally in that situation but they carried on working.

I think thats completely different

Much like your DH I also paid our mortgage off and I've retired. DH now pays for all bills. I only pay for my personal expenses, like having a coffee out, parking, new jumper etc. For holidays and big expenses we go 50/50 and I use some of my savings. This is what works for us and our situations sound similar. I will shortly start to earn a little money from a PT job, but that'll only cover my personal expenses so I am not dipping into savings.

Agreed. And parents usually discuss this together, whereas OP’s DH has pretty much presented this as fait accompli.

How much is the mortgage payoff? Divide that by £900 to see how many months he is banking
Again 🤔 this is a ridiculous calculation to make. The number of months he is "banking" is the remaining term of the mortgage.

he may as well invest his lump sum, keep the mortgage and keep paying it each month from his lump sum.
This is very possibly a good idea - they should at least consider it.

You can reduce your work when you are the same age as he is.
I think this is the main concern in this thread. If he squanders his pension lump sum on effectively buying himself a year off, then op will probably NOT be able to retire at 55.

Women don’t just decide to get pregnant, leave their jobs and become SAHMs. It usually involves some kind of discussion with the father of said child about the pros and cons and with some degree of forward planning.

It sounds like the OPs DH has unilaterally made this decision without any discussion or thought for how it might impact her or their DC.

You do if you are married, it’s a joint asset.

Your situation sounds absolutely fine but the OP has said her DH won’t have any income beyond being able to pay for his hobbies, so no really the same situation.

Those are two separate issues, is it irresponsible to retire early? We don't know because we have no idea how much his pension or lump or mortgage balance etc are and she has confused us by saying he is retiring them saying he is taking a year off.

But her post is NOT asking if he is being irresponsible but about her resentment that she will have to continue working while he has time to spend on his hobby and also know she doesn't have a pension pot that will give her the privilege of a lump sum.

"However DH then doesn’t want to go into any work for at least a year, for his hobbies his small pension will see him through but this means he cannot pay anything towards the weekly/ monthly bills.

As it stands we combine £1k per month for all joint and household bills, one of these being the £900 mortgage.
With that gone, technically he doesn’t need to contribute any more as he has paid his bit but I feel a bit miffed to carry on working 40+ hours a week and sometimes overtime while he has no job, no bills to pay and just enjoys his hobbies (they are free/ low cost)."

"He is 55 I am 48.

He deserves to take it easy as he’s worked hard but I am feeling it’s not fair I keep working in my stressful job (but I do enjoy and no lump sum and shit pension) while he can have daily lie ins and relax enjoying bike rides and such"

If he is 55 and his pension won't pay for the bills he hasn't taken early retirement, he has taken redundancy and needs to get back out in the job market for the next 10-15 years. Then he should have a big enough pension to do as he plans.

Only considered in the overall "pot" of assets from which a fair share for each party is decided upon in the event of a divorce.

If there were no divorce, the pension pot could be left to a third party, like a mistress or any other person nominated by the pension owner. That's not to say the widow couldn't challenge the decision but it does not automatically become her asset in the way that a joint tenancy property would upon the death of her DH.

Why?

It was a defined benefit pension. You paid into it and then got a percentage of your salary when you retired. I haven't a clue what her pension 'pot' value was - even if there was a 'pot', I'm not nosy enough to ask!

One of my pensions is defined benefit - I paid into it (3% of salary, I think) and I get 10/60ths of my final salary, as I worked there for 10 years. The final salary has increased due to an indexation value, can't remember which one! So, if my final salary was 30k and I left the company 20 years before retirement, which was defined as 65, I was due 5k per annum - which was then annually increased by the index figure for 20 years, say it averaged out at 3% each year. So, at age 65, I got about £9000 pension, which goes up annually by the index figure (RPI? I'm not sure)

And the amount that I got was not based upon what I had paid in, it was defined benefit so it was based upon the number of years that I'd been a member of the company pension scheme up to a maximum number of years, and my salary when I left.

And it was the same for my friend, as her pension was a defined benefit one.