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Original poster

Paying into husbands pension

9 replies

fruitstick · 05/12/2023 08:20

I am self-employed and have put little into my pension over the last 10 years. I need to sort it out.

My husband is a high rate tax payer (just) and is employed, so his firm match his contributions.

I feel like financially, it makes more sense for him to pay more money into his pension, and for me to take on a bigger share of the day to day expenses.

But the cautious side of me feels like this is utter madness from a personal security point of view.

We have been married for 20 years, so presumably if we did split half of that is mine anyway.

Would I still be better off building up my own pot.

This is my thinking, I haven't mentioned it to him, nor him that me so he's not the one suggesting it.

OP posts:
DustyLee123 · 05/12/2023 08:23

If you did split, him having a bigger pension could swing it your way to have a bigger share of the house, if you wanted to keep it.

WalkingThroughTreacle · 05/12/2023 12:25

The only benefit of paying it into his pension is the difference in tax relief. Probably around 20% which is not to be sniffed at but not a no-brainer either IMHO.

Yes if you divorce you should get 50% of it, or as part of the overall settlement. You'll have to wait for the divorce to run it's course though before you actually get your hands on it. What if you separate but divorce is much more contentious? It will be even longer before you see any money and there could even be reasons why you take divorce off the table.

Even if you stay together, the money is in his pension and under his control. If he has miserly tendencies, or could be prone to financial abuse, you might live to regret that.

A few things to consider and only you can decide but I would be wary of sacrificing control of that money for the sake of a bit extra tax relief on contributions.

Original poster
fruitstick · 06/12/2023 08:09

Actually that's a really good point. I didn't think of it as him having the main income.

Thank you.

OP posts:
MaterMetella · 06/12/2023 14:30

Also, as you draw down your pension paying your nominal rate of tax, isn't it best for two people each to have their own pensions so you each get the benefit of your personal allowance, basic tax rate etc ?

Otherwise if all the money is in one pension you only get the benefit of one person's personal allowance, one tranche of basic rate and (obviously depending on how much you draw down per year) you'll pay a larger amount of tax at the higher rate.

Or have I misunderstood ?

Original poster
fruitstick · 06/12/2023 14:35

MaterMetella · 06/12/2023 14:30

Also, as you draw down your pension paying your nominal rate of tax, isn't it best for two people each to have their own pensions so you each get the benefit of your personal allowance, basic tax rate etc ?

Otherwise if all the money is in one pension you only get the benefit of one person's personal allowance, one tranche of basic rate and (obviously depending on how much you draw down per year) you'll pay a larger amount of tax at the higher rate.

Or have I misunderstood ?

Also an excellent point!

Thank you Smile

OP posts:
kitchenhelprequired · 06/12/2023 14:40

The alternative is if you have any alternative savings in your name to balance out and protect you just in case. Both get shared in divorce but at least you both have something to lose.

Hitchens · 10/12/2023 08:11

fruitstick · 05/12/2023 08:20

I am self-employed and have put little into my pension over the last 10 years. I need to sort it out.

My husband is a high rate tax payer (just) and is employed, so his firm match his contributions.

I feel like financially, it makes more sense for him to pay more money into his pension, and for me to take on a bigger share of the day to day expenses.

But the cautious side of me feels like this is utter madness from a personal security point of view.

We have been married for 20 years, so presumably if we did split half of that is mine anyway.

Would I still be better off building up my own pot.

This is my thinking, I haven't mentioned it to him, nor him that me so he's not the one suggesting it.

Don't do it.

Even if you stay together forever you are sill reliant on him having control of the bigger part of the pension money. Do you really want that ?

smallgreenplant · 10/12/2023 08:17

Another thing to consider is what if he dies first? Would the entire pension pass to you or just a small proportion of it?

juicelooseabootthishoose · 10/12/2023 08:35

With my parents if my dad dies first my mum only gets 50% of his pensions. So please make sure you check.

Personally, even if my husband was going to be paying the majority of household expenses in retirement i'd want my own pin money. A new coat and pair of boots each winter. Few haircuts a year. Theatre tickets. Meeting friends for coffee etc.

Do you have full state pension entitlement? You can check online if you have contributed enough to get the full entitlement. And sometimes you can pay a cash lump sum to but your missing years. If i was missing sum id want DH to help me with that.

I'd also like expect him to make we BOTH have a good retirement and de-risk any situations that may occur as a team.

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