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We live in the UK. I have a job and pay into a company provided pension (with the company then paying in some extra). My wife left her job a couple of years ago and is now a 'house wife' aka stay-at-home-mum and will be for a while. She has a very small pension with her previous employer but doesn't have an income of her own. She's also therefore not paying National Insurance contributions. I'm sure there must be many, many people in this situation.

What is the best way to ensure she will have an equally safe retirement? I'm confident she will be okay if we stay together (we simply share my pension) or I die (she gets all / most / some of my pension). My concern is (not wanting to seem pessimistic and I don't think this is likely, I just want to cover all bases) what happens if we split up. Will she still be eligible for a share of my pension? If not, is it better to pay some of my income into a separate pension for her - the downside to that is losing the matching contributions from my employer.

Finally, I understand that not paying National Insurance could reduce the state pension she will get. Is that true? Should we may voluntary NI contributions on her behalf out of my salary?

Thanks in advance!

Kate
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3 Answers3

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She should probably make voluntary NI contributions until she has a 35-year contribution record, so that she gets a full state pension in her own right. She can also contribute up to £2,880 net (£3,600 gross) into a personal pension and get tax relief on the contributions at the basic 20% rate, even if she's not paying tax. Pensions can now be split upon divorce, which is a relatively recent change in the law.

Mike Scott
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It's only a partial answer but your wife will get National Insurance credits if she is claiming Child Benefits. These will cover the State Pension but obviously not anything else. So make sure to start claiming or switch a current claim to her name.

It's also possible to 'top-up' National Insurance to cover years where there are not enough contributions. Again this only affects the State Pension.

Robin G Brown
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This should be a comment however you need to check that all her contributions are at the full rate as in the past there was a reduced housewife rate of ni which gave a much much worse pension.

She could request a summary of what benefits she is entailed to https://www.gov.uk/state-pension-statement

Pepone
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