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Not eligible for child tax credits but can't afford childcare

(43 Posts)
zebra88 Thu 04-Sep-14 08:35:24

Hi
Myself and my boyfriend are hoping to start a family but have just used the online calculator on the gov.uk site and been told we would only be eligible for £20 per week child tax credits.
We live just outside london and our mortgage is £1200 per month. As our combined income before all deductions is £49,080 we are over the threshhold for child tax credits.
I know to alot of people what we earn is alot, but with the cost of living and travel here, after deductions it doesn't leave that much and as childcare is about £6 per hour here it looks as though one of us would have to give up working.
I'm worried as I don't know how easy it will be to get back into working after the child is born, and as we both earn about the same, it is still going to be a squeeze to pay the bills and mortgage on one wage, I made a stupid assumption that we would get help with childcare whatever we earned. Its been an eye opener!
Anyone have any advice if you are in a similiar position ?

antimatter Thu 04-Sep-14 09:06:38

Really difficult decision. Someone recently said on MN that they lived on one income for a year saving the other for until the baby was born. So if that isn't doable you both need to get better paid jobs.
Each of you is earning just under 25K.
With mortgage of 1200 a month + bills that salary is not sustainable.

My ex used to earn similar salary 16 years ago when I was looking after my 1 yo dd at home but our mortgage was 700 and everything was much, much cheaper! We are in the burbs in London. Then I did 1 year of postgrad, had my soon at the end of it and went back to work (but in the new profession as a graduate) when they were 1 and 3. Almost ll my salary went on childcare, ex got promotion and salary of 40K and we could breathe a bit.

You need to know exactly how much you need to live on and start saving as mad. Are you able to up your salary or perhaps take extra work at weekends?

snickers251 Thu 04-Sep-14 09:06:56

No advice just wanted to say its a shit situation

I have never wanted to be a sahm (I find it boring and repetitive) but I've had no choice, my ds is 4 now and been a sahm ever since. Although some people love it

It's a huge lifestyle change anyway so going down to one income was fine for us

Have since has another dc who will be eligible for preschool next year and I'm still not sure what I'll be doing (dh now running small business so either throw myself into that or look for my own job)

Does your work offer any childcare vouchers?

TheAwfulDaughter Thu 04-Sep-14 09:12:09

Would it be possible for one of you to take a pay cut and go part time? This may bring you down under the threshold and make you eligible for some assistance, and you would only have to pay for half the cost of childcare?

What fields do you work in?

StripyBanana Thu 04-Sep-14 09:12:24

Thats a huge mortgage for the income. Can you extend it or go interest only for the 3 years of childcare costs?

We had to move out of london and chose to go one income in the end. Ideally I'd have been p/t

zebra88 Thu 04-Sep-14 09:27:35

thanks so much everyone for replying.

i think we are going to have to save for a few years but im already 30 yrs old sad. and also try at least one of us to get a better paid job.

my job offers childcare vouchers so may have to ask if i can go part time but im not even sure if they will agree tbh. i work for the nhs my boyfriend works in a school.

i know sacrifices have to be made and if the only way to do it is to stay at home then i guess if we want a child thats the answer but its gonna be so tight money wise.

I haven't thought about changing the mortgage but it's a good idea. I guess i'm just so shocked that we will be getting so little help, and we have no grandparents nearby. its not like we are going out every weekend and we haven't had a holiday in a long time so when i started mulling this over a while ago i just assumed that we would get enough benefit to at least cover the childcare to allow us to keep working. but now i get why so many of my friends stay at home and give up work.

StripyBanana Thu 04-Sep-14 09:34:03

Im surprised you thought childcare was paid for! Its the biggest expense going with kids..

however depending on your career it can be worth working "for free" in effect to keep the career going. At 3 they get 15 hours childcare funded.

you also need to work out how you'd manage pick ups and drop offs with work. You may find a childminder cheaper and more flexible.

KittiesInsane Thu 04-Sep-14 09:37:41

If you definitely want children, best go off and bonk, frankly.

At the very least, you'll have 9 months to save like mad, sort the mortgage, look at a move to somewhere cheaper. But you could find it takes years of trying and could be quite fun anyway.

antimatter Thu 04-Sep-14 09:42:40

if you can get to the situation that one income covers bills&food&mortgage then IMHO makes sense for second one to use just for childcare, as this will not be permanent expenditure - 3-4 years per child max and then it goes down. Career of that person carries on and by the time kids are 10-15 your income is comfortable, you've paid most of your mortgage.

Often hard to get back into the same job market after a long break etc.

Getting better paid jobs can only be good anyway so that should be your priority for now.

LIZS Thu 04-Sep-14 09:43:21

As you aren't yet pg you have time to reconsider your lifestyle/job situation and save up to cover those early years. Do you need to be paying £1200 as a mortgage. Could you move to a cheaper area/downsize or renegotiate the mortgage term and package, pay off some capital ? Could you start a fund , even £50 pcm into an account now would be a start once you need it . Often NHS and education jobs are quite flexible so pt and more local to home may be an option for either of you. Also nursery is not the only childcare option , do your homework as a CM or even Nanny share could work out more cost effective. Also bear in mind that by the time you have a baby ready to put in childcare even the £20 may well have disappeared although you'd still get Child Benefit.

zebra88 Thu 04-Sep-14 09:45:39

yes i was very idiotic of me i wish i had saved for years now and id have been able to pay for it. i just hope my employers are understandable.

I have been thinking that yes it may be a good idea to keep working for virtually nothing because then when they go to school i could keep bringing in money and not have to find a new job.

lolz to KittiesInsane , yes you are right it could take years! Tesco value bread here we come

TheAwfulDaughter Thu 04-Sep-14 09:46:15

You have the right to request flexible working and a change in hours once you have DC. Seeing as they are trying to shed staff and save money,
I can't see you being rejected? Your partner has the same right too.

It's not solely for you to take the hit though, career wise. Do remember that. Your boyfriend could stay at home until DC get some of their free entitlement or he could find a new job that fits around your hours.

LittleBearPad Thu 04-Sep-14 09:52:13

Is your boyfriend a teacher? You say he works in a school. Will he have school holidays off? That would help cut the costs. Especially once they get to school age.

Flexible working may help.

Childcare vouchers help a bit.

Saving will help too.

It will be doable but you need to plan it given your income and mortgage.

Cecinestpasunusername Thu 04-Sep-14 09:53:49

We're in a similar situation zebra, except we already have a dc. Can your dp also claim childcare vouchers? If both of you can thats £234 x 2 worth of tax free childcare a month. They're also talking about a scheme in 2015 whereby the government will fund 20% of your childcare costs.

For us, and we have the exact same incomings and outgoings, that makes it a bit better albeit quite tight.

Also you both still have parental leave to make use of once the child is born, right?

zebra88 Thu 04-Sep-14 09:56:18

as you have said makes sense to use one salary for the mortgage/bills/food etc and use second salary for childcare.

I have looked into the cost of childcare and i think its about £5 per hour around the london area for a childminder. as i work 37 hours per week which would mean i would need to pay about £250 per week which when i add on the cost of getting to work, would leave my salary with about 200 leftover.

boyfriends salary wouldn't cover mortgage and bills this is the trouble, its about £500 short but i could use the £200 from my salary to cover some of it. god knows what we will do about the rest just cross fingers for 2 years until DC is able to have 15 hrs free childcare.

thought about getting a loan even.

can't believe we r gonna be so skint! oh well it could be worse right!?

zebra88 Thu 04-Sep-14 10:02:31

my BF isnt a teacher so he wouldnt get school hols off unfortunately.

i didnt realise that my BF could claim vouchers as well. thats really good news , i thought only one of us could. that will make a huge difference.

i believe we could both ask for flexible working but whether they will agree is another matter

LittleBearPad Thu 04-Sep-14 10:20:31

Claiming vouchers does depend on your employer and whether they are enrolled in the scheme but this is easy to check. You may be able to ask for slightly different hours even if you can't go part time. This might help cut the hours ie bf drops off whilst you start earlier than you do at the moment and you pick up whilst he stays later.

TheAwfulDaughter Thu 04-Sep-14 10:24:36

Does your boyfriend want to be a teacher? What is his role within the school?

Thinking outside the box here massively: but he'd get student loans to retrain which would bring you under threshold for help. He may even get a childcare grant as a student. Then when he's qualified, although teaching is certainly not a walk in the park- it would boost your income. School holidays off with the kids would be helpful too!

zebra88 Thu 04-Sep-14 10:34:01

hi

he works in administration but funnily enough is just finishing his degree. its my hope that after he finishes that he may be able to get a better job. i keep my fingers crossed that he can.

ThePrisonerOfAzkaban Thu 04-Sep-14 10:45:05

I've found in your situation a lot of mums go back to work on nights, just 2-3 per week and then nap/cope during the day, that way there is no child care costs, or baby goes to nursery for 3 hours in the morning, halving the costs. I know it's what I did when my DS was born, and most of the night nhs staff do, it's not easy though

ThePrisonerOfAzkaban Thu 04-Sep-14 10:46:14

They mostly work Fri, Sat nights too, that way DP is at home at the weekend.

zebra88 Thu 04-Sep-14 12:58:27

im keeping my fingers crossed that they will let me work evenings and weekends , which would be perfect. that would really cut the costs down as id be basically still working full time.

m0therofdragons Thu 04-Sep-14 13:05:00

You do adapt. I planned baby number 2 so dd1 would go to school, baby on nursery me at work. I had twins, no help with child care so ended up dropping my hours to 12 a week term time only and Spent the last 2 years being sahm then doing my work when the dc were in bed or at weekends when dh could take them out. They've just turned 3 so get some funding, hurrah! It is rubbish but actually I've seen my dc grow up and realise I missed so much of dd1s toddler years, I'm actually grateful I've been forced to stay home. Savings account will be empty by the time they start school but then I plan to increase my hours. fingers crossed!

zebra88 Thu 04-Sep-14 13:24:59

hi
its good to hear you've got through it, i think it's a case of adapting and switching things around as you say.

its a slow process but when baby number 2 is at school you should be able to start saving again.

Babyroobs Thu 04-Sep-14 14:36:51

Could you saty home and look for a part time job fitting around your partners hours? That could mean little or no childcare costs. For many couples this is the only way to avoid high childcare costs when children are little.

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