I Asked My Husband to Pay Into My Pension When We Had a Child – Here’s Why
BBC News
When Molly and Taylor Haylett started their family, they hadn’t really planned for what it would mean financially.
"Our first child surprised us, so we weren’t prepared for it," says Molly, 30, a financial adviser from Essex.
Molly and Taylor, who’s a train driver, were earning similar amounts, but once Molly spent more time at home with their baby, the balance shifted.
"Taylor’s career propelled and mine took a step back," she explains. "There’s an unintended impact on the person who spends more time at home with the kids."
One solution the couple implemented was for Taylor to contribute to Molly’s pension while she was off work.
"We were looking after both our futures, not just Taylor’s," Molly says.
She thinks this is something far more couples should discuss before having children.
"You’ve got to just ask him," she advises a friend who is considering stopping work after having kids.
"People think only about the present and paying the bills but the person taking time off work could end up with much less in the future."
Taylor, 33, admits he wasn’t previously aware of this option but was supportive of Molly’s suggestion.
"We committed to a life together and if I could help out I would and I was pleased that I did," he says. He adds that while Molly is more organized when it comes to budgeting, they have open conversations about their finances.
Research by Octopus Money found: over a third of parents reduced or paused pension contributions during parental leave, while 63% didn’t know their partner could contribute on their behalf.
A partner can make what’s known as a third-party pension contribution. For someone with no or low earnings, up to £2,880 can be paid in each tax year, increasing to £3,600 with basic-rate tax relief. For someone still earning, their partner can also contribute, subject to the recipient’s pension limits.
Katie Guild, co-founder of financial community Nugget Savings, notes that the pension gap can begin during maternity leave due to drops in pay and potential stops in contributions during unpaid leave. She recommends couples consider whether the working partner could help make up this shortfall.
Before having a baby, she suggests Molly and Taylor (and other couples) work through these key questions:
- What are our long-term financial goals?
- How will parental leave affect our finances?
- Can we afford to pause or reduce contributions temporarily?
- Could the working partner contribute to the other’s pension?
Molly and Taylor, now parents of two, say they were much more prepared the second time around and have shifted their mindset about dividing household costs.
