How much should a working partner pay into a stay-at-home parent's pension?

[Karma1387]

How do you work out the right amount to put away into a pension from partners income as a stay at home parent?

Me and my partner have decided I wont return to work for the foreseeable future due to childcare costs and wraparound fees at primary school.

I am aware this means I wont be paying into my work pension. I have seen lots of advice that the working parent should put money into the stay at home parents private pension. How do you work out how much to put away?

I have considered doing 4% of a full time minimum wage salary ( as this seems fair as its what I would be earning if I returned to work. But I thought I would see how others do it before we commit to anything.

Any experiences appreciated.

(We are getting married just so it doesn't turn into a thread about needing to get married)

As so you are still having to use ASC and school holiday care I assume.

The reality is for me to get an office job would involve breakfast club, ASC, School holiday care. I would be the one taking time off for sick kids due to earning far less, I would have likely a 1 hr commute due to where I live requiring a second car, insurance, tax, fuel. The costs associated with working full time don't make only seeing my kids for tiny amounts each day worth it. Not to mention me and my parter still wouldn't see eachother and would never have time as a family.

So whilst being a SAHP isn't ideal. Working with such high commuting costs and childcare costs isn't worth the loss of time and the increase in stress.

Lots of MN posters think that being a SAHM is a poor choice, and very risky as it makes you reliant on a man for your future security, which often ends badly.

Lots of MN are wealthy compared to the national average (who knows why?), hence people who can't imagine a retirement on anything less than many tens of thousands of annual pension income. For most of the population that is just never going to happen.

However, these are not really the issue at hand.

The point about a husband paying into the pension of a SAHM is that she has independent access to money. Her own money, not just a shared joint account.

In the case of divorce, all bets are off, and the courts decide, so it is not really about divorce, it is about what kind of life you have together if you stay married into retirement.
If he has a good pension and you don't, then after retirement you become (or remain) dependent on him for money. That leaves you open to being controlled, or at least him getting his own way over things like where you go on holiday and how much you spend, or you feeling guilty every time you buy a new dress with "his" money, or him buying a nice car for himself and you getting an old banger for a 'run around'.

Look at how you share money now. Is he generous, unselfish, happy for you to spend what you need? Is he sensible with money, not a spendthrift?
The type of person he is now will be the type of person he is in retirement. Look at him carefully and imagine being reliant on him for money in your seventies.

Thank you for this! Very insightful.

Lots of MN posters think that being a SAHM is a poor choice, and very risky as it makes you reliant on a man for your future security, which often ends badly.

Lots of people think that because it's true.

I guess it’s lucky your partner does want to miss out on all of that then, as he’s going to be solely responsible for whether or not your child eats.

I think you’re very foolish to opt out entirely of supporting yourself and your child for so long. Life will be very difficult for you if you divorce. At least use this time to get some kind of training or upskill in some way.

Are you hoping to own your own home? How much pension you need is very much affected by whether you’re able to purchase a home and pay off a mortgage during your working years. Whether you can do that is in turn affected by how much each adult in the partnership can earn.

My partner would be doing the same job and aiming for the same progression if I worked or not so that is an irrelevant point about my partner missing out.

Interested to know what you suggest in terms of training/upskilling?

After nursery years, the wraparound care isn't that expensive though. Mine is year R and aftercare 3-5 is £10 a day. We do 4-5 days a week. And you can run it through tax free childcare so it's more like £8. It is def worth it for us to both work!

For breakfast and afterschool here is £20 a day. For 2 kids thats £160 a week and £640 per month after using tax free childcare. 3 with kids it would be £1440 per month. Not worth working a full time job with either of those costs.

And those amounts dont even take into account the school holidays or sick days. Or the cost of buying and running a second car.

I'm glad its worth it for you both to work but unless I basically want to work full time just to pay for someone else to watch my kids then it seems a tad pointless.

I spend no where near that on out of school clubs or holiday clubs. Yes I am lucky my job is flexible and my kids are slightly older but still primary.
I take my kids to school and pick up, just work it into my day. My boss knows, I don't hide it. I don't usually take a lunch hour so do my hours. The kids are fine at home after school while I finish off work.
Won't you get free nursery hours at some point? Might be worth working a bit if you can. I understand your current night job may not be working but there will be something.

I think it’s really wise if it’s affordable. But when I was a SAHM for a season we really didn’t have the money. We were married with entirely shared finances and his pension has excellent survivorship benefits. But I think if you can afford it you absolutely should.

Also if they earn over the limit for child benefit then make sure you claim and pay back rather than not claiming as it gives you state pension qualifying years.

I already do get free nursery hours but that doesn't make working full time financially worthwhile. It only covers 8.30- 3.30 3 days a week so I couldn't work full time and the odds of a part time job working 9-3 with no commute 3 days a week I can't imagine comes up really.

And that is the cost of the breakfast and afterschool clubs for when they are at school (although I imagine it will increase by the time they go) which the reality is I would have to use if I went and got a full time job. And then the cost of holiday clubs ontop and running a car.

My partner is where near earning enough to not get child benefit so I am already getting the national insurance credits.

When we worked it out, we looked at years to retirement, predicted earnings, my potential return to work and earning capacity, dates of draw down because of our different ages, and then considered how to maximise tax efficiency.

We share finances, and don’t have his/her pots so it made sense to plan for the long term.