To ask you how you manage childcare costs?

[Lalalalawhitenoise]

Specifically with 2 nursery aged kids and both parents working.

my eldest has 30 free hrs but with the wrap around care and then the out of term costs, it is eye wateringly expensive, roughly £2k per month full time. I earn just shy of 40k and take home shy of £2300 per month and with the rises in everything (we’re expecting £500+ extra on our mortgage if things stay as is, mortgage is up end of next year). I’m freaking out. No childminders in the area with spaces either and this is one of the cheaper nurseries

We don't have them in full time DH does 4 days a week, we also have a option of a shorter nursery day which we manage by both working flexibly so that reduces cost. Our 30 hours are split over the full year not term time only which means more weeks are covered. The bill does drop fairly substantially when the funded hours start. Would say we dropped about £500. Speak to the nursery find out what it will be. We also use the govt tax scheme.

It's still nearly all of 1 salary but means the other salary covers the other bills. We also have massively cut energy usage to try and bring everything down.
If your mortgage rate doesn't end for a year then you can always pay as much as you can close to what you will be paying into a savings account. That way its less of a shock when you do have to pay it and you can earn interest. You can then do a overpayment on the mortgage or you have built up a rainy day fund.

30hrs childcare for eldest, tax-free childcare for both. I only work 3 days a week and DH is planning to hopefully drop to 4 days a week in a few months so we will then only need 2 days nursery for each. Eldest starts school next September so we only have 1yr of two sets of fees. Although obviously will need some wraparound and holiday cover for eldest when at school anyway. We don't have anyone around us able and willing to help us with regularly childcare. In fact even in situations when the children are unwell and can't attend it is very rare that anyone around us can or will help us out unfortunately. We pay about £1k a month. DH earns about what you do working FT, but I only earn about £12k or so on my 3 days.

Op please don't budget on the premise that mortgage rates will reduce any time soon. The last decade has been a blip of unprecedented low rates. Its widely expected this is not a short term rise, its a resumption of normal rates so likely to stay at at least 5 or 6% for the foreseeable. If that won't be affordable you may need to plan to downsize etc.

Depends on your husbands income?

I work in finance, the base rate within banking was never expected to get above 4 in our own internal forecasts with an understanding that it would be temporary.

nationwide was one of the first to hike them up to 6% but now as dropped them to under 5% on fixed rates.

we’ll have to play it by ear of course to see how stable things are over the next year and see how the mpc move re the BR; if it’s static but rates don’t reduce a tracker might be the best short term fix for us. After 08 crash and massive recession which we are looking to replicate boe brought the br down, right down in a year, to get the economy going after a recession they will lower the br to get people spending again

50k

Dh and I also work in finance and we've been building in a return to long term interest rate norms for a while now!

After 08 crash and massive recession which we are looking to replicate boe brought the br down, right down in a year, to get the economy going after a recession they will lower the br to get people spending again

It's not really the same against a backdrop of massive inflation, weak pound etc

Cheap money long term has had many negative effects.

Yeah there will for sure be a new normal interest rate wise but I’m not sure it’s 6-7% on mortgages was my point, it’s pretty unlikely we’ll see the 0.85-1/2% deals around again for a good long while imo

Yea sorry OP I’m in the ‘I can only afford one because of this reason’ camp

We struggle paying even for one lot of childcare fees. We’re lucky that childminder is pretty flexible and therefore only does 3.5 days which we work around us wfh or finishing early on Fridays (I have one day off to balance also)

Husband gave up his career, basically

He's massively struggled to get back into anything like the type of work he was doing so we've lost 10 years of prime career age earning potential.

He's retraining now but will start at the bottom again if he can even get a job. So no childcare costs but massively missed out on income for 10 years if you call that a cost.

OP have you tried appealing the rejected flexible working requests? I’m not a HR expert but run a business and had a few over the years, according to our HR advisors it has to be accepted unless it can be rejected for one of the 7 statutory reasons.
A few won’t work for your employer like work can’t be reorganised between staff and they can’t recruit to cover hours. So they’d have to be relying on one of the others.
How we have done it in our business is said we have concerns about X reason but will allow a trial period and assess it in 3 months. Can you suggest a trial period to show their concerns won’t be affected, which reason did they give? Can you show it isn’t a valid reason? You could suggest working for 1 hour on your day off during a nap time to check message if it is about affecting quality and performance. You would only need to do it for 24 months and then revert back to 5 days after that. You need to make it as difficult as possible for your employer to reject the flexible working request. This is the link to gov website on statutory reasons for rejection and how to appeal www.gov.uk/flexible-working/after-the-application

You or DH will have to get a better paid job between now and mortgage renewal to cover the cost. Easier said than done but I don't see how less hours is viable - you need to the opposite and get paid more for your time

It’s too late now but there’s almost 6 years age gap between my 2 children for this same reason and we were lucky there was no twins. I think If you look at it this way, it’s only till September and one will be in school and you only need to pay for wrap around care which is cheaper and only one in nursery so it’s short term loss.
I wouldn’t give up work but both of you can ask your employer again for the flexible work request. If only one of you gets accepted and you need nursery 4 days a week, the saving on one day will make a difference as well.

When I had 2 DC in nursery, and was still with my EXDP, our annual nursery bill was £30k. We earned a combined gross salary of about £180k, however the monthly cost of nursery was still double our mortgage.

If you and your DH have been in your current jobs for a while, is there any chance of promotion, or getting a new higher paid job outside your company?

I am self employed and work from home (always have), so I work either early on the morning or in the evenings. It means I have little free time and it cuts into time with DH. DD now goes to nursery 3 days a week, but it was a real slog when she only did mornings.

I appreciate that doesn't fit your situation, just answering the question of how we manage.

Are you using tax free childcare? It makes a huge difference.

Speak to the nursery about how they work the 30 free hours.

We get 3 'free' days a week in term time so pay £5 for meals on those days and then full price for the other two days.

We worked out how much we'd need to cover the school holidays so pay the same amount into tax free childcare every month so the extra to cover holidays builds up on there and we don't need to worry about it being extra expensive some months

I think @NorthernDuckling's advice is good.

Totally different situation but I'm stuck in the EHCP (SEN support) system with our one DC (would have liked more but IVF cost us thousands) and I am fully planning to take the local authority to tribunal to get what we're legally entitled to. Sometimes you have to - politely and persistently - force the issue. It won't make you popular, but hey ho.

I think that your salaries are on the low side for financial services. We are on similar in education. You might do better with the more ambitious of you really going for it and the other doing 3 days - that should bring one of you back into basic rate.

You need a massive spreadsheet!

I was going to suggest this too - they need to have good reasons for it.

I was going to suggest sending your oldest to a nursery school but I see you are already doing that. Once your eldest is in school no you don’t pay for lunchtime cover just any breakfast/after school club. Breakfast club is often much cheaper than after school but you can use the tax free childcare against these costs still.

in terms of what we do we are just riding it out until all are in school. I just got a new job with payrise which will obviously help, I see you just got a new job but maybe your husband could start looking too?

good luck OP, it’s a tough slog but you will get there

DO NOT DO THIS.

You're protecting your future earning potential, pension and financial independence

I don't have any advice as my kids are now school age (and there wasn't a fully blown CoL crisis when mine were in nursery) but wanted to offer sympathy as it's really difficult.
It does get better at school age and breakfast club/ASC/wraparound is a fraction of the eye watering costs of early years.

Write a budget, cut what and where you can including being savvy about annual renewals/food shopping/meal planning (obviously all that stuff also takes time so spend some time together working it through), accept that it is short term rubbish but longer term (from sept 2024?) things will start to improve. Don't give up work!

Agree as well. Unless one of you can career break and go back without penalty (some industries better for this than others). But definitely not giving up entirely!

I wouldn’t quit your job for the sake of a few years, career progression, lack of pension etc etc. especially for unmarried women

This.
Worked for nothing for nearly three years. But it preserved my mental health and power balance in our relationship and my pension now looks great.
Twenty years on, never a single regret.