Dealing with uneven pensions?

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If you're a long time married couple with very uneven pensions, how are you navigating/planning to navigate retirement?

The situation is this...DH had high paid job with very good pension and retired at 55. I've worked part time all along and done the lion's share of house stuff/bringing up kids/mental load.

I have a tiny pension that's worth bugger all as an income and will need to work until state pension (even that isn't full state pension due to P/T work)

We have a joint account for all household bills/holidays that DH pays into, i don't use that for personal expenses. I have my own account for my earnings but I also use it to buy household stuff/top up shops/take my turn buying meals out etc.

I could try and find a full time job now which would top up my NI and get me a better state pension, but it would impact both of us and the life we enjoy - we travel a quite a lot which I'm able to do with my job as it's very flexible. He would hate it if I worked full time and we couldn't go away when we wanted to, but I don't know what the solution is (I don't know what sort of job I'd get anyway, I'm not particularly well qualified for anything)

When I talk to him about it, he just says "it'll be fine, don't worry about money, we can live on my pension" but I do worry.
There's also a bit of resentment on my part that he's enjoying early retirement while I'm looking at working til I'm 70.

I don't know what the answer is (I don't even know what my question is really, I'm just worrying about my income in retirement and he isn't taking it seriously)

Surely your joint income is exactly that.

his pension goes into a joint account with yours and you split it.

If your husband says you can live on his pension, what's stopping you? Are you worried he'll still hold the purse strings and you'll have to wait for handouts? Is it important for you to have income that is entirely yours?

It sounds like the two of you need to sit down and talk this through properly. Not ‘it’ll be fine’ but if you retired too, how would it work? Do you have enough money in the joint pot to live the lifestyle you want to? In that case it is mad that you are still working to try to bring in your ‘share’ when he is not as you have contributed in other ways.

In the end you’re either a team or you’re not. I can’t imagine me or my partner retiring and not the other. When we have enough to meet our joint financial needs we will both go.

Which years of NI are you missing? Until 5 April you can pay for missing years from 2016 onwards. If you were at home with young kids you get an NI stamp if you were claiming child benefit. Have you checked your NI record? It’s definitely worth doing.

If you are worried he will be in charge of all spending and you won’t be able to spend money on yourself even if there are ample funds to do so then you have a different problem….

My pension and my husband's went into the joint account - there was no 'that's mine, that's yours'.

My DH and I share finances. Jointly both able to retire in our 50’s and go self employed. Could not imagine one of us working full time to 70 when one of us has a big pension to live on.

I’m in this position. We both know that his pension is only good and mine poor because my career was sacrificed to his. We both know that wasn’t fair. It’s our money, not just his. I’m 6 years off retirement age but I stopped work a couple of years ago.

Surely you just carry on in the same way you've used money until now if your DH was working FT in a higher paying job? Are you happy to carry on working flexibly and PT, for a few years at least? Is DH the sort to actually get bored after a couple of years and look for a PT job, or volunteering?

We've always treated all earned money as joint money - so all goes into the joint pot and then we get allocated the same amount for personal spends. That has worked for us for periods of me earning more, then me earning nothing for a few years and now DH earns a higher salary and I am PT. This includes DH's pension, which we've always treaded as 'our' pension.

Why would you treat the pensions as anything different to working income?

The reason you have a lower pension is because you sacrificed your earning power for the benefit of home and family life which created the environment from which DH was able to achieve what he has. His pension is every bit as much yours as it is his and you are just as entitled to early retirement as he is. Either stop working altogether or if the two of you need more than just his pension to make ends meet then he is just as responsible for earning that extra aa you are - and he probably can do so much more easily than you as with a career like that behind him he can probably earn the same doing a day a month in consultancy as you could earn working flat-out.

Surely you looked at your finances before he retired and made a plan for this??

I won’t retire until my retirement income is sufficient to provide for both of us. I want to retire early and spend our time travelling together so I’m hoping she’ll agree to at least pause on the job she enjoys so we can do that for a year.

We've talked about it and he says it's joint money - whilst I'm happy to use the joint account for household stuff I've never used it to buy personal things/clothes etc. I use my own income for that.

I've checked my NI contributions and I'm in line for the minimum state pension which is what's got me worried. I suspect the issue is more mine than his but I'd feel guilty buying things for myself out of the joint account because I've never really done it.

Why is he retired when you are still working, unless there’s a big age gap between you? That’s my first thought. You should have both sat down before retirement, gone through both your pension forecasts and worked out when you could both retire. You should also have both been topping up your NI each year so that you got a full state pension. As you were home at the kids that was as much your DHs responsibility as yours.

You have until April to top up your NI contributions, after that it’s only backdated to the last 6 years.

What do you mean by minimum state pension? Do you mean you are on course for the full rate of £221.2?

I am confused about minimum state pension comment too. Does this mean you have 10 years only?

Can you buy more years now of the state pension. Have you checked your records? Some years could be cheaper to top up.

I don’t understand why you only have 10 years contributions? I thought you got 12 years credits for bringing up children.

You only get NI contributions for raising kids if you applied for child benefit.

OP - I think any shared finances should be genuinely shared. There should be no "topping up the weekly shop" or "my turn to buy dinner". Anything you do together or buy for the family should be joint account and your personal spending money just for haircuts/drinks with friends etc.

Look at topping up your NI record. Consider working 1 extra day a week and putting that money into your personal pension. Also look at how any savings are shared to maximise both of your personal allowances for ISAs etc as a couple.

I don't want to add to your concerns, but your current scenario falls apart if you separate or your DH predeceases you.

Due to a whole raft of changes in Government policy (no home responsibilities protection at the time of my DD Birth, being a WASPI woman etc) , the early death of my DH and a severe health issue at 60, I reached 66 with very poor pension provision.

Most frustrating was the missing NI years when my DD was born and after the age of 60.

I was allowed to buy back some of the later years, but not the early ones.

One of the most urgent things you can do to improve your situation is to go online to Gov UK, get a State Pension forecast, understand where your shortfall years are and get a quote to buy missing years.

I understand that you are currently able to buy back more years than previously but that that window of opportunity closes on 5th April 2025.

https://www.moneysavingexpert.com/savings/voluntary-national-insurance-contributions/#:~:text=You%20may%20be%20able%20to,5%2C500%20in%20your%20State%20Pension&text=There%20is%20a%20potentially%20unbeatable,years%20from%202006%20to%202016.

If I was you, knowing what I now know, I would then get some financial advice relating to all the possible scenarios you might face. That IFA should have a full understanding of your financial situation and be able to come up with recommendations. I would be asking, whether you should buy back your missing NI years? whether your DH’s pension arrangements protect you if he predeceases you? and whether you could use capital to buy pension provision?

So maybe you should start practising now?

My private pension is 5/6 times more than my husband's. Both retired. All pension income in one joint account and we pay everything from there. Separate savings accounts which we will use for high cost items.

When we get state pensions, we may decide to have some separate money for personal frivolous spending.

It's worth topping up your state pension, we've both done ours, costs circa £800 per year. Check your NI record carefully, especially when off with children as you should get NI credits.

We’ve had unequal incomes the whole of our married lives: sometimes me earning more, sometimes him earning more. All income in one pot, all bills/savings/holidays/joint stuff out of that; small equal fixed amounts out to personal accounts for discretionary spending every month.

Despite this I do know how you feel - it was a shock for me going from being the one who put in more to the one that put in less; he’s struggling with not earning at the moment while between jobs.

Basically though you just need to get over it! For your marriage to be happy and fun you need to dive into the “all that I have I share with you”. You’ve contributed massively in free labour and household management I bet; and it sounds like your DH is more than happy to share fully with you. FWIW it’s lovely to be able to be generous to the people you love, so let him.

Maybe a more formal arrangement like ours above would suit you.

You retire at the same time and you share would be the norm surely?

You say you would feel guilty using joint money for yourself, but he has said you have full access to it. That's on you really. Assuming you change your mindset, is there enough for both of you? If not, I would suggest he should get a part time job to even things up too. If there is, you have no issues surely?