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?

tax free childcare will save you 20%

How about if you change your thinking/budgeting and assume the childcare comes out of your dh wage. Then psychologically you are earning your full wage. Or at the very least 50/50.

Nursery is so expensive! I wish we had Euro style subsidies.

Tax free childcare will save you max £500 per quarter - although it is 20% it is capped at £2,000/a year - I didn't realise that when I did my research. Also only available if neither you/ your partner earn over 100k.

With some nurseries the cost goes down slightly when they move up to a toddler room (ratios are different) so that's worth checking out.

Roll on being eligible for the 30hours!

Don't think of it that way, childcare is only needed when you are both at work. Therefore, the nursery fees will not even take up half your income. Remember that all expenses for the baby are joint, as are all parental responsibilities.

I think the cost of childcare makes much more sense when you think in the sense of childminders/nannies/nursery staff having to live on what you pay plus pay for equipment etc.

That’s what changed it from “how much???” to “oh yeah obviously” in my head when I first started paying.

Yes it felt like a second mortgage to us our bill topped out at £800 at one point. Had a Childminder (&still do) for 2nd child best decision I ever made (1st child went to nursery) Better quality of consistent care with more flex on the days i need to work late. Look long term, many of my baby group mums stopped working and now our kids are older I’ve got a solid career and pension, but work compressed hours, whilst I know of other highly educated women who are doing min wage jobs and have killed their careers& pensions. It’s a massive balancing act in an ideal world both parents could work 3-4d week and share parenting.

Yes, we had very little money over for discretionary spending during the big bill years of early years childcare.

But I looked at my working as something that benefitted the family, and that those expensive years would pass. We have much more to spend now, and one of the reasons is that we both took a longer term view.

I use a childminder as the cost is nearly half that of a Nursery - it's the only way we could afford it plus the new tax free child care account means the government tops up what you put in by 20% so that can be worth up to £200 a month

Childcare costs are a nightmare in the UK. On the continent, it's generally heavily subsidised.

"How about if you change your thinking/budgeting and assume the childcare comes out of your dh wage. Then psychologically you are earning your full wage. Or at the very least 50/50."

Thus is an important point.

It's a family expense, not the mother's expense.

Overall, it will cost OP's family at least £300 more if they choose to forego one Parental income. And that short term cost also brings significant long term erosion.

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

That’s good that he is taking his responsibilities seriously. Make sure thay he understands that he will have to support this child for the next 21 years and not just while you are together. Many men dont seem to grasp this.

It might make childcare are costs easier to understand if you compare them to your husbands take home salary. It’s what he needs to pay to allow him to continue in his career after having a baby. He’s investing in his future.

If you are thinking of what % of your salary it will be then don’t forget to split in the same ratio as both your earnings.

For example if he earns £70k and you £30k and nursery is £1000 a month then he should take £700 of and you £300.

Don’t fall into the trap of paying all from your salary : bank account even if ‘you share money’. It’s vital that both parents have visibility on the sheer impact of nursery fees and feel the impact. This will mean that both have complete understanding of any future decisions around what type of childcare you have and goes a little way to protecting you as the lower earner.

If you both work you can get £2k a year support and then the term after they are three another 30 free hours (possibly for everyone). It does get easier.

I work full time with a toddler but no no one else who does. Mainly because it’s too expensive and wanting a day or two at home whilst they are young.

We paid 50% of each of our full time net salary for full time child care of baby no. 1. Luckily we were in professions where wages rise which we knew so we just stuck it out and managed. Before that we just cut back in lots of ways eg I went back full time after 2 weeks. We bought all baby stuff second hand or at jumble sales etc etc

I am wishing time away till next April and when we will get the 3 year funding. We will feel so rich. It will save us about £120 a week. It is a struggle until then. We cannot save anything, everytime we try something breaks it's our boiler this month! We are determined to save over half what we will save when we get funding though. The rest will go to paying off our car loan early etc. .

I get it. DS is 7 months and I'm going back 2.5 days a week. My salary after tax isn't halved as I will pay less tax, DH is doing the half day so nusery will be £100 a week. Not too awful.

We pay the equivalent of my husband's whole salary for one child at nursery. Free hours from September will be amazing!!

Those saying "think of it as 50% from your salary and 50% from your DPs", I don't understand how that makes it better, particularly if you have joint finances. It feels just as rubbish to think "DP and I are both slaving away at work for (effectively) £5/hr" as it does to think "I'm slaving away at work for (effectively) £3/hr" - except that in the first scenario you both feel demoralised and like there's no point in working, and in the second only one of you feels like that

I don’t get it either. You look at it as one pot rather than he pays 50% you pay 50%. If one salary covers everything with a sahp then when the sahp goes back to work you look at covering childcare, petcare if needed, travel, lunches if different and additional work costs.

You don’t need to go back the square one and hash out what percentage of each person’s salary goes where as it’s the same. Just as if a single parent took on a second job, you would factor the cost that come with that...

It was a struggle until DS received the funding in January. It does feel for a while that it's not worth going to work then things level out a bit.

"in the first scenario you both feel demoralised and like there's no point in working, and in the second only one of you feels like that"

I don't see why one person should carry all the emotion/responsibility for a bill that allows both to continue to work (whether that bill is paid directly to a supplier, or is simply straight cancellation if a proposri N of family income, both now and longer term impact, if one person ceases to work.

If the feeling is one of demoralisation, then perhaps looking at the emotions which are driving that. Because firstly you don't have to see it that way, and secondly even if you find you help it at least you'll have recognised that it's a feeling not a fact and start to look for ways to come to terms with it.

@MiddleClassProblem it's not about joint finances though, plenty of people who do joint finances still judge their scenario on whether a woman's salary is worth working and will say "oh we're only £100 better off with me working" rather than seeing it as a cost to enable you both to work. Obviously if you are weighing up whether you want to stay home that works, but if you are keen to stay in work you need to a) see it as a joint expense or b) properly do joint finances and see it coming out after both wages, not compare it to one which many do, even when they pool money.

Those saying "think of it as 50% from your salary and 50% from your DPs", I don't understand how that makes it better, particularly if you have joint finances. It feels just as rubbish to think "DP and I are both slaving away at work for (effectively) £5/hr" as it does to think "I'm slaving away at work for (effectively) £3/hr" - except that in the first scenario you both feel demoralised and like there's no point in working, and in the second only one of you feels like that confusd

Well if the OP and her Dh are going to feel like that about having children, then isn’t it better that they take that into account now, while they are making their plans before the TTc?

Having children
Paying a mortgage
Running an expensive car

None of these are compulsory. Smart people work out the cost and decide if they afford it. If they can, or can but choose not to, thats their choice.

Yes of course people’s financial circumstances change. But you are an idiot if you have a child and then go “ Oh shit, I thought they were free to run”.

And while I’m on a rant, let me just add this.

I find it interesting to note the apparent difference in the cost of having children on different threads on MN.

Ones like this, where people ( quite reasonably IMO) complain that their baby / toddler costs them 600 - 1000 pounds a month.

And threads entitled “ why is my boyfriend being ripped off over child support “ where everyone seems to agree that babies costs peanuts - the only costs are formula and nappies and 20 pounds a week is extortionate.

And the way that children numbers 1 and 2 become magically cheaper to run once their father decides to have child number 3 with his new GF.

So maybe the OPs husband could get one of these 20 pound a week babies instead .

Nice post, nigel !

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. If it's not subsidised it's not a surprise. A nursery means you are sharing the cost of childcare with other parents; on the other hand not only do you have to pay the carers' salaries, you are also covering the cost of their employers' NI contributions, pension contributions, sick pay, holiday pay etc. So it's going to mount up.

When my DH gave up work to be a SAHD, we realised that, after we took into account all work related costs, we'd be £10 a week less well off. And he was earning about twice median wage!