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.

I don’t understand why you would turn down a pay rise?just bung anything over 100k in a pension (obv only works upto 160k)

I absolutely understand that, but my BIL earns about £150k a year and doesn’t know his arse from his elbow when it comes to anything ‘financial’.

The cut off is £100k net adjusted income. Are you aware of this, so you are deducting his gross pension contributions? Also if his pension provider has already given him tax relief at the basic rate, he can take off an additional 25p per £1 of pension contributions too.

As things stands, the salary sacrifice NI relief on pension contributions over £2,000 is ending in 2029.
That won’t affect your taxable income which is what the childcare stuff is based on.

Pay for a financial advisor.

This feels so unfair, because on paper a bonus sounds like good news, but in real life it can end up making things worse once childcare is involved. You definitely won’t be the only family stuck in this sort of position. Childcare costs and those threshold cliffs are exactly the kind of thing that catch people out. Sencillo’s whitepaper, The True Cost of Education 2026, is a useful read on the wider cost side if helpful: https://www.sencillo.finance/join-us-download-whitepaper

Everything over 100k on his pension including pay. Alarming that he has been refusing pay rises!

I can’t believe someone who is earning next to 100k doesn’t understand they can salary sacrifice into a pension and has been turning it down!

Until you get to £160k and then you’re back to square one!

Just a word of caution re salary sacrifice/pension - at DH's company, they can only add/change contributions once a year (unless automatic increase ie salary review) - might be worth checking and possibly deferring the payments if needed.