Nursery Fees v salary

[Hippopotas]

I may be mad but I’m considering TTC in a few months so just doing a bit of research on nursery fees and I’m shocked to find that if I want to go back full time after I have a baby the cost of nursery will take all but £300 of my after tax income!

How do people do it and still manage?

It is really hard until they turn 3 and you get the 30 hours. Do you have a partner who earns? Can you afford to live off their salary? Are you entitled to any benefits?

It’s only for the first 2 or 3 years (depending on your income) that are the worst, then you become eligible for free hours at nursery.

1. Childminders are often cheaper than nurseries
2. There’s some government help available with childcare costs - google it for details, I’m not sure how it works now
3. Decide whether continuing to work is a worthwhile investment in your future career or you’d prefer to stay at home
4. Space out your children so the eldest is 3 and getting free nursery hours (everybody gets 15 hours free, most people get 30 hours but there are eligibility criteria)
5. Split childcare costs with a partner
6. Save a lot beforehand!

Nursery fees took the equivalent of all of my salary for more than over two years when both DC were at nursery. It came out of the joint pot of course, but I was effectively working for no financial gain. However I didn't want to be a SAHM and we had no family help so had to suck it up. Both went to nursery from being 4 and 5 months pt. Now teens I am so glad I did. I preserved my sanity, my skills and importantly my pension, and now hoping to retire early. Think long term.

My DH earns considerably more than me so I don’t doubt we could live off his salary whilst most of mine is taken up by nursery fees but it just seems mad to me that it has to be that way.

This has been the biggest shock to me, and I really think childcare should be government subsidised like it is in a lot of other European countries.

I try to think of it that really my salary only covers half the childcare costs, the other half is covered by DH (although in reality we have joint finances). But I do appreciate that where finances are tighter this isn't an option and it can be financially unviable for both to work.

Do think about the long term though and not just the short term - i.e when kids are school age your childcare costs will have gone down a lot and if you keep your career going in the meantime you're likely to earn significantly more over your lifetime (sector dependent).

Childminders are also cheaper (although hardly any where I live)

It's a massive expense especially before they start school. Even once they've started school you need to budget for before and after school care and holiday childcare.

With great difficulty. Ive always worked in childcare so luckily my DC have been able to attend where I work (different rooms) but as nursery nurse style Jobs are generally low paid, even with my discount doesn't leave me with much once everything is paid!

Have a look at childminders in your area, they tend to be a bit cheaper than full time nursery. But yes, it's a shock! We didn't do the research that you've done and my DH ended up quite depressed when we first started paying nursery fees and how it took such a massive chunk of our disposable income. We adjusted and had more dc, he moved to a better paid role and I've had a couple of pay rises so we are more comfortable now. The first couple of years were hard though.

@cptartapp that’s what I think I want to do. I don’t really want to stop working. It’s not a career thing more a sanity thing. Plus I worry how hard it will be to get back into work after 3 years out if I did that.

Remember when they are old enough for 30 hours and 15 hours, free are term time and it’s less having it all year around, mire like 10 and 20 hours.

You need to get the person you are planning to have the baby with to pay for half of the childcare, it’s not just your responsibility.

If they are not willing to care for their baby and financially support them, then don’t have a baby with them. Find a man with more integrity.

You used to be able to get childcare vouchers from your employer so they're tax free. Mine are older now, so not sure if it's still a thing, but it does save a bit of money and means you pay less tax in your salary.

You need to see the cost of childcare as a shared cost with your partner. You also need to realise that there will be a couple of years between the end of maternity leave and the point when subsidised childcare kicks in when things will be quite tight, but this is an investment for the future because it enables you to keep your career going.

You might also want to consider whether you and/or your partner could work more flexibly to reduce the amount of childcare that you need. For example, could you each stay full time but compress your working hours into four days? If so, you'd only need three days of nursery rather than five. I negotiated a split shift in those early years, working in the mornings and evenings so that I had afternoons with dd.

Look at the tax free childcare scheme. The gov will top up 20% of what you put in up to a cap, that's about £160 a month back in your pocket

The first thing you need to do is get it out of your head that this is your salary vs childcare, childcare must be a joint expense. I know it's easy to get trapped in the thought process that you could stay home therefore it's your salary that's covering childcare, but there's a lot of other benefits to continue to work (if you choose this path) such as pension contributions, job progression, and independence. So if you decide you want to work for every other reason, financially, it's a better pill to swallow to see the childcare coming out of both your wages.

We have joint money and DH has no problem paying for anything. I think I was just shocked at the cost and then I compared it to what I walk away with after tax each month and it floored me.

Childcare vouchers have stopped for new applicants now

The key thing to remember is that it is 'only' 2-3 years and that time does pass quickly :)

As long as your husband isn't earning over £100k a year you are entitled to tax free childcare. You can get up to £500 every 3 months.
www.gov.uk/tax-free-childcare

Same here! I plan on going back 3 days a week until we get the free hours when child is 3. Mainly because I think for us it is the happy medium (I love my job and have missed it even though I adore my child and having this precious time with them) we'll then review it at that point. It is crazy, most people can only have their job held for 9months to a year yet the free hours don't kick in until so much later. I live in an area where there aren't many jobs in what I do so to come out of the workplace for 3 years would make returning very daunting. We knew all this before TTC so have saved hard and accepted the first year or so back at work will be a bit tighter financially but for us is worth it. Good luck!

It is a massive expense in the early years. Our child care fees are way more than our mortgage. Long term though, I know I'm better off staying in work, financially and mentally.

In September, the youngest will get the 30 hours assuming it's still happening, and the costs will drop down a lot. Long term we'll be better off, as if I'd given up work I don't think I'd have got back in at the same level. I'd have had to take on more responsibility or a lot less.

Yes you can save 20% of childcare costs via the government. (This is the scheme replacing childcare vouchers). Look up "tax free childcare".
I'm sure the OP's finances are split between her and her partner, she is asking if it is worth it to work when the difference to family finances with her working versus without is a paltry low sum! I get it, OP, we are soon to emerge out of the other side of scrimping for years as youngest DC will get 30 hours free. We will feel soooo rich in comparison!