Later Life FTB - Paying more than younger partner

[Wilson79]

Hi! I could use some advice. I’m speaking to a Lawyer too but they are very transactional and I would appreciate some direct experience if any one has been in a similar situation.

My partner (37) and I (45) have been living together for 6 years and have 1 child (4). We are late bloomers 😆 and hence are also FTBs in Scotland. We are buying a property right now which is exciting but a little stressful.

My partner is a caring, kind man whom I completely trust not to intentionally do me harm. However he is forgetful and not the greatest with money. He earns substantially less than I do, has some savings (£5k) which he describes as ‘untouchable ‘ and some debt (£6k) which he is aiming to pay off in 1 year.

After tackling a sizeable debt (£33k) and saving up for 13 years (£66k) I’m finally in a position to buy a home and see this as an investment in us. But it is literally all my life savings with no exception . I am fortunate enough to receive an annual bonus in addition to a good salary for what is often a very stressful job involving quite long hours but which I mostly enjoy. I am contemplating putting 100% of this each year into mortgage too to pay it down early.

My partner is very supportive and we pay our bills now (and plan to in future ) pro-rata based on our income ratio - 70:30. Childcare is 50:50 as I do compressed hours and he does mornings and we share evening and weekends.

My dilemma is 2 fold

1. if our relationship did breakdown how could I ensure that our shares were recognised as not being equal. A google online suggests a Minute of Agreement might help here to clarify my stake as being larger

2. Slightly more muddy… given how late we are starting I wonder if hammering down the mortgage if I’m lucky to keep getting a bonus annually would make sense or (given tax implications and looming pensions crisis) should j put it in my pension. The mortgage is for 23 years but I could potentially pay it down in 13 but it would cost me £244k which would otherwise go into my pension and earn compounded interest. Plus my partner will likely work 7 years on after me and I can envisage this alternative ‘salary sacrifice ‘ leaving me with limited funds to travel and enjoy retirement whilst he earns and spends beyond my means forgetting all the annual top ups I’ll have done.

Worth noting too that my partner has almost no retirement saving so it’s highly likely I’ll need to subsidise our lifestyle later on. Just feeling crazy amount of pressure here as the main earner. I want us to look after each other but I feel a bit like all this weight of financial health and planning is on me.

fyi he did offer to ‘pay rent ‘ and leave his name off the deed but I don’t want that either. I am just very confused about what is for best here. Thanks in advance for sharing your experiences and insights.

Lots of parts here. I don’t know about the legal structure to protect your deposit.
it is beneficial to you to combine retirement savings and paying off the mortgage, not just paying off the mortgage.
you don’t sound like you have any confidence in being able to rely on your partner. If you retired and eg your pension was $100 a month and his income $400, why wouldn’t the outgoings be split 20/80, just like you proportionately split outgoings now? So he wouldn’t be living a life you couldn’t afford, as you’d be sharing the costs of life? I’m trying to understand the underlying patterns here. You also sound like he’s not going to contribute at all to the mortgage, in which case maybe it should be just in your name.

Thanks it’s a good shout doing a bit of both. I just feel worried I’m going to pay all this in and be left with a shitty retirement in the end.

He is absolutely putting in a share to the mortgage which is why I insisted he should have a formal stake.

I hope dilemma 1 is not an issue for us but I’m just looking at the fact that people change and relationships breakdown sometimes due to no one’s fault so just hoping for best but preparing for the worst 😆

As you can probably tell I can’t sleep because of the stress of this house move. Keeping me up at night!

I'm sure there's an agreement called 'tenants in common'. It reflects what each person has put into the property, so if you divorced there would be a fair distribution of funds i.e. 80%/20%.
But I'm not a lawyer and this is from memory, so definitely ask your lawyer.

I don’t know the legal solution either (moreso as I am not in Scotland nor even on your side of the world).
When you say he is putting in a share to the mortgage, do you mean a share of the deposit (which doesn’t seem possible if he only has an untouchable 5K).
Frankly, I would go with his offer of paying you rent in a house that you solely own. It just seems so off-balance otherwise. A) he is not prepared to touch his savings but you would be left with none; B) he is not good with money and is forgetful; C) His debt could impact the amount you could borrow; D) You already have concerns that he will not be financially respectful of you in your retirement. E) Presumably your bonus is not armour-plated guaranteed so you may not be in a position to reduce your mortgage term by 10 years, and what if one of you lost your income through job loss or illness.
You want to look after “each other” but you haven’t indicated any way he is now, or will in the future, look after you financially.
In your position, I would buy and have only my name on the deeds. I would charge him rent, a decent amount. Continue to share the bills proportionately, but you pay everything towards maintenance, insurance of the house, etc so that he has no claim on the asset. Though of course you could make provision for him for future residency or inheritance.
The great thing is that he has already acknowledged that you would be better off keeping him off the deeds.
Good luck with all this, OP.

You can ringfence your deposit so if the property is sold you get that back first. You can also own unequal shares of the house ie. 70/30 to represent the amounts you contribute. This is v . Straightforward for a solicitor.

Personally I would concentrate on putting extra money to your pension. It is often the the most tax efficient way of saving. Should your partner increase his earnings you could both put more in to the mortgage. At some point you can take out 25% of pension fund tax free. You can use that to clear mortgage if needs be.

Agree you’d be better off keeping the house as yours. Over half of relationships break down where people are unmarried parents. Why haven’t you married? You have a child together and are about to rely on each other financially so what’s stopping you committing fully? (Not suggesting you should but what is the thought process there?).

You should each own the house in proportion to the amount of deposit you both put it, and then both pay the same proportion in mortgage payments.
However, given his financial acumen (or lack of), I’d just buy the house alone and charge him rent at half the going rent for whatever the property you buy would be.

you don’t sound like you have any confidence in being able to rely on your partner
this. It is really stressful to be in this situation and you are planning on this until you did based on the experience that he will let you down.

id seriously not be giving him access to anything like my house.

Your DP is only 37, plenty of time for him to build up a pension.

He needs to become money savvy. Introduce him to Dave Ramsey's Baby Steps and get him a copy of Meaningful Money by Pete Matthew - really easy read and will explain budgeting, pensions, savings.

Definitely salary sacrifice pension for the 40% tax relief.

Honestly, I would not buy a property with someone who was careless with money. I just wouldn’t. Once you are financially enmeshed he will know that you will bail him out if he decides to go on a spending bender because the alternative is to default on the mortgage or bills.

He’s 37 years old and a father, he needs to start adulting. Get a pension, live within his means and support his child to the best of his ability.

I think it's fine for you to pay the mortgage pro rata according to your salaries provided you have a legal agreement protecting your share but all other bills should 50:50.

He's using half the utilities, insurance protects him (you have got a joint life assurance policy, haven't you?) eating half the food etc.

Buy the house as tenants in common (or whatever the Scottish equivalent is) with a deed of trust setting out your respective percentage shares.

Don't overpay the mortgage because that money is better used in pension (tax relief).

Do not get married, as doing so will erase any financial planning such as the deed of trust and he could end up entitled to 50% (or more!) of assets you consider to be yours (including your pension).

In the OP's position, I would think very long and hard before marrying him. A lower earner is fine, but someone who is financially flaky.....not so much.

I would at the least have your deposit ring fenced- it sounds like you'll be doing all the heavy financial lifting for the rest of your life. You say he's contributing to the mortgage- is it significantly less than your contribution will be? Does he have any scope for a better paying job or would you be willing to take over his finances (although you shouldn't have to) to improve your joint position? Because at the moment it sounds like you'll be buying the house, you'll pay the lions share of the house (especially if paid off early) and you'll fund your joint retirement.

I think you need to rethink his offer for your name to be the one on the house, with him paying rent. You clearly have no confidence in his ability to pay his way, and are worried about how to protect your future. Owning the house yourself is how to do that!

You need a proper conversation with him to plan for the future. You cannot be worrying that you’ll be the one funding both your retirements, and worrying that when you’re retired but he’s not yet, he’ll be swanning around spending money! This is not a stable base for a loving relationship. Him being a lower earner is fine, him being untrustworthy is not.

Personally, I would buy in unequal shares, pay the mortgage in the same proportions throughout and I would not overpay - focus on your pension for now, it will have a significant impact to your retirement and if you are a higher earner the tax savings are next level. You can always do a push on the mortgage in later years if your partner is in a better place financially- don't do it alone and subsidise him.

Please don't suggest she gets married to this man!

I would buy the house myself. I wouldn't put myself in a position where someone much younger than me who earns a lot less than me and who is bad with money shared in the ownership of my house.

You are at an age where you have to take money very very seriously. He is not taking it seriously.

Is there a reason why he only works mornings? Did that change when your child was born?

Do you have any faith that he would pay half of all repair costs? Would he automatically assume that because you earned more that you could pay for it? The cost of the house isn't just in the money you spend on it when you buy it but on the upkeep as well.

@Wilson79 check with your legal adviser how to buy with a split in percentages owned. In England/Wales it's tenants in common, not sure if the same in Scotland.

Re: pension. Please see an IFA. I have a work pension but it doesn't align with my risk assessment and I opened a private that does which I put much more monthly in and it has outperformed my work pension by 40% in the last year. If its not your daily job you do need advice though.

Make sure you have life insurance and income protection. A will, LPA and that the life insurance is in trust too.

Honestly, you are not married. Buy the place in your name only and have him pay rent. And make sure you have a watertight tenancy agreement.

Its the most sensible and safest thing to do to protect your own finances.

Say your £66k is 20% deposit for example, that means there is 80% to split between you, so 40% each, then add your 60% on so you would own 60% and him 40%. You need a deed of trust and do the mortgage as tenants in common

Similar situation with earnings and ages here, along with FTB status, but reversed: I'm younger than DH. Childfree by choice. Not married. Been together 14 years.

I put all my extra money into my pension. So if we split that is mine. My pension has (and will always have) a lot more built up in it than the house. I benefit from tax relief and interest. If I want to pay off the house early I will withdraw my 25% tax free from the pension. I plan on early retirement (at 55-57) unless I lose my job or similar.

We own the house 50/50, but in reality I saved all the deposit (30k) and pay the mortgage. We don't do a "split" with the finances, more like "one pot". I make sure all the bills are paid. He mostly pays for food and days out. But I keep and spend my bonuses as I please. He keeps any extra money he has month by month to spend as he pleases. My bonuses tend to go on joint things (e.g., holiday, car repairs, campervan, house deposit) - I haven't been in this job THAT long, so I want to start saving my bonuses more deliberately, although that has been hard so far.

Because I earn so much more than him (4x his salary) I don't mind if we split up in the future and he gets half the house. He would need it, and he has contributed in his own way as much as he can. I still have my pension and high salary.

Plus, in our situation, I think it would be unfair to make him pay for "consumables" (e.g. food, days out, rent) whereas my contribution was ring-fenced as an investment.

I'm not saying you do the same thing as me. But I like the idea of proportional ownership of the house in your case if you do want to ring-fence your finances. This way, he is still building up an investment for himself in case things do go wrong and you split.

Is it fair - if you split in 10 years - that he has nothing to show for it, despite contributing for many years into the household relative to his income? Especially as unmarried people, he would get none of your pension savings (which you say are "for us") and none of your other savings. Having a share of the house so he can get his own place feels like the bare minimum.

I'm sure, on his side, the psychological power balance would feel better too. This was another reason why I wanted my partner as an equal owner. In fact, he loves the house so much, and has done so much to it (DIY, sorting the garden, laying floors, painting, decorating): it wouldn't be fair - in an argument/split - to say "this is my house, I pay the bills", which feels like what the "rent" suggestion is implicitly implying.

Aren’t you a family?

I'm not clear what your point is?

Thanks everyone. Really has helped me to clarify my thinking. My solicitor has suggested and I’m happy and partner is happy to declare % share when we do the deed. No plans to marry and I think I’ll focus on pension first and getting more security built back up before subsidising mortgage. Really appreciate all the thoughtful responses here and thanks for taking the time to help.