Bonus may affect 30 free nursery hours eligibility, what are our options? 10k

[Kiwibubs]

Hi MN

out little girl will be starting nursery this August. My husband is on 100k and turndown a pay increase as it wouldn’t be beneficial considering the cost of nursery without the 30 free hours.

Today his boss told him they want to give him a bonus for all his hard work (he’s literally doing 4 different jobs for his company). Great that he’s been recognised for his hard work but looks like this could jeopardise the free hours.
It’s 10k given in 5k installments this month and again in 6 months time.

Does anyone have advice on what we should do? If accepted we’d end up having to pay 21k in nursery fees per year so seems pointless to accept.
Maybe his company could put the bonus in my bank account?

if anyone has had this issue and has a solution I’d love to know.

thank you.

Wow.

Jesus

Pension?

If he adds it to his pension - together with enough to take him under the £100k cut off then you should be fine.

I’m not after sarcastic responses.

Put it all in his pension.

Salary sacrifice to put in into his pension.

Thank you 🙏

Thank you everyone. Sounds like the pension idea is the best solution

I would put it in his pension. That is what I did with my bonus of £9k. I earn just under £100k and knew that tax man would take most of it.

Why?

Brilliant thank you

we have the option to pay ours into our pension

Pension, and he shouldn't have turned down the pay rise - that could have gone in pension too!

Get his employer to put it all in his pension and it will keep you below the threshold. Make sure its his employer that does it - not your DH once he receives it. We do this every year as if we accepted my DH's bonus (£10k), the cost in the extra nursery payments would be almost twice what his bonus is (£19k - London nursery), so would actually cost us money. The whole 100k cliff edge system is ridiculous.

This also applies to pay rises btw. Slightly scary he was not already aware of this but hopefully he soon will be.

Pension!

No, but you will get them. Because apparently on Mumsnet, the more you pay in the less you should want to see anything for it.

Pensions your best bet.

The thing is it doesn’t run true. People don’t turn down pay raises they add to their pension pot…

Has he really turned down a pay rise without checking to see what his options are for brings his income under the threshold?

Is this real? If so, he was crazy for turning down a pay rise when he could have just used salary sacrifice options like putting more in his pension. Its very common.

Put it all into his pension

Same for pay rises.

Gift Aid also attracts tax relief to bring your income below the threshold. As you apparently don't need the money, you could always give it to charity.

Ask them to put the bonus in his pension as an AVC.

Any pay rises he can also put into his pension to bring him under the £100k limit. Unless he maxes out his pension payments already then do that in future so he doesn’t lose out on pay rises.