FIREside Chats

hugheskevi

becky_rtw said:

I've always contributed at least half of everything and had my own money, but because I am younger than OH when I retire I'll be becoming more reliant on his pension income, its more than enough for both of us to live off, but I'm just trying to get my head around that. 

Do you think an "allowance" would work or do you all already have fully joint finances?

My wife and I have had completely integrated finances for many years prior to retirement, and this will continue afterwards.

I've always managed our finances entirely as a couple, doing what is best for the partnership and not managing them as individuals. This meant for many years my wife had significant 0% interest, free fee credit card borrowing, whilst having no savings, nor property in her own name, nor ISAs but putting very large amounts into a pension. That all ensured we had as much capital as possible, whilst optimising tax liabilities and minimising ISA charges by putting all ISA investments into my accounts.

Most spending is on credit cards, usually 0% spending as then it is easiest to manage by just having a single large payment to make every year or so. We then just keep about £1,000 in each current account for ATM withdrawals and whatever.

We have a joint bills and stuff account but not a full joint account. We are totally open with money, but I've always been financially independent  and 'paid my way', so its probably more in my head than anything. I'll be bringing significant investments and cash, but my pension will always be small and not payable for another 28 years  

We have two joint current accounts. This is primarily to avoid the risk of being reliant on a single institution, and also to gain account benefits. Of these two accounts, I primarily use one, and my wife primarily uses the other. That is mainly to make sure both are active, and having spend largely separated can be easier if I need to track down an historic transaction.

As time passes and various investments and pensions come into payment I'll tweak timings, from which account funds are taken etc, so as to smooth resources over time, and ensure that the survivor's income of whichever of us dies first is the same whoever dies first.

I think the key thing is having more resources available than you spend, once that is the case it doesn't really matter how resources are managed, as long as they are not wasted.

powerspowers

It’s a reasonable worry Becky, moreso if you aren’t married. 

Im lucky that my husband and my incomes are similar. We contribute equally to a joint expenses pot and then manage what’s left ourselves, including individual savings and additional pension pots. Big purchases we usually split 50/50. I tend to have an overview of finances, we’ve both been burned in the past so over communicate really. 

I think when our incomes change we will have to take a more joined up view. He is 10 years older than me but isn’t planning on retiring particularly early, our fire plans are more so I can retire at the same time. 

Retireinten

We've had completely joint finances since we bought our first house 23 years ago. We have various current, savings and ISA accounts in various names to take advantage of offers/stoozing etc. Our daily spends mainly go on a credit card with the odd bit of cash from our joint account.

I think there are two issues here, the first being to accept that the structure of your income will be different. I get it... I've contributed the same if not more than my husband throughout our relationship, even when our chidlren were small and I was the main carer. Like you, I can't imagine not contributing because that's one of my 'jobs'. 

It's a mindset change and I suspect it wouldn't take too long to adjust. I'd talk to your husband about it, I expect you will get lots of reassurance not to worry.

In terms of managing this practically I would either go joint with a joint account for bills and a joint credit card for spends or have two separate credit cards for spends.  

Suffolk_lass

After the sudden death of someone close to us left his partner in a precarious financial situation we each set up a separate "me" account and I have consciously balanced the finances in DH's favour since then as all the vehicles, utilities and such like were in my name. We have a friend who fell ill (peritonitis) on a coast to coast walk and had to be airlifted to hospital where they contacted his sister, because his partner of 35 years was not his next of kin. If for no other reason, they have since married and I think others should hear their story. It's not just money to talk about

becky_rtw

Thanks for all the thoughts and strategies guys - really appreciate it  

We are married (5 and a half years). 

We had a brief chat last night and turns out OH wasnt worried about it at all, and just said, 'well obviously I'll pay my pension income into the joint account and that will become our main account at that point and if that doesnt work for us we'll try something else' 

I do love it when he's already solutioned, I dont know why I didnt think of that option to be honest. Great to have the open conversation though. We can decide nearer the time what we do my side of the money, maybe pay some in monthly (as it will be lump sums rather than income). Or save it for big expenses etc. 

savingholmes

hugheskevi said:

edinburgher said:

@savingholmes - chat on the pensions board suggests the ship has sailed - no providers who will accept transfers as of fairly recently

Just to clarify - it appears no providers will accept transfers on an insistent client basis, ie, where an adviser has provided a recommendation not to transfer. If an advisor recommends a transfer there should be no problem.

I couldn't get any to accept me at age 50 - they all said I had to wait until age 55+

Suffolk_lass said:

Also Money helper(.org) suggests you can no longer transfer an unfunded (normally public sector) DB unless it is to another DB Pension

Mine is a funded DB pension that I'd like to move. I have a second public sector DB pension that I plan to keep.

edinburgher

Funded public sector pensions are fab - certainly helps me sleep easier 👍

savingholmes

It certainly makes future planning easier

becky_rtw

Just an update from us. 

We are still crunching some numbers at the moment and getting up to date valuations. Wow Capital Gains + Corporation tax is painful. Then there will be no doubt many many specialist agency fees. 

Anyway, all okay, but we may have to revise down our new house budget or hope that the last valuation we had on the property has increased enough to offset some of the tax liability. It was 2014 so one would hope that was the case, but being part commercial does mean the same rules dont always apply. 

Another option is that I carry on working for longer than planned, we'll just have to see where we net out in a few weeks time to see which scenarios look realistic and achievable.

CCW007

Exciting times Becky, made possible by your planning!  It helps to see plans coming together for people.