DH and I going part time to deliberately reduce wages

[Bucketheadbucketbum]

Just working out the free childcare hours and actually DH and I will be muxh better off if we both dropped to 3- 4 day week to deliberately reduce our incomes. Would obviously be nice way to live too! Anyone else doing same? Seems mental but we've looked at it 100 times over and it's true!

And you'd have lost child benefit too

@ScruffyGiraffes

I am really sorry. That is crap. You have tried really hard and I agree with you.

Well put. Why work when other people can shoulder the load?

Exactly @WeightoftheWorld. I agree with every word you say.

I'm a well paid senior professional (over £100k) but after tax, net take home is nowhere near what others might expect. Then factor in childcare and mortgage (in my case in London) and you're really not left with loads after. No wonder people like OP want to reduce hours rather than be worse off. Irritating that people don't understand that OP has to date been a high tax contributor and will continue to be even on reduced hours.

Soon enough we'll be telling lower paid professions (eg teachers who are UNDERPAID) or other lower paid jobs that they need second jobs to pay more tax or that they must switch to a five day a week (or why not six days?!) higher paid job to contribute more tax!

Yes that's an absolutely ridiculous idea, that working less to avoid the punitive taxes (as any sane person would! Nobody works for free?!) while still paying huge amounts of tax that cover all of your own state services and provide a large amount of money to be given to others on lower incomes is in any way comparable to people receiving money they didn't earn, or worse deliberately manipulating the system to receive more than they should of money they didn't earn. It's not remotely comparable, unless we decide that all people (and their time) are state property. 🤣

What a load of bollocks.

Exactly, this isn't someone saying "I'm not going to work and contribute", it's saying "I think £33k is quite enough tax for one year, and if I earn more I'll take home less due to the childcare cliff edge so nah."

With two parents paying that kind of tax I think it's safe to say they'll still be massive net contributors.

With two parents earning just a smidge under 100k each they'll be paying approx 66k in tax per year as a family.

Hardly expecting other people to shoulder the load...they're shouldering many people's loads with that tax contribution.

Thank you for listening and understanding.

Tbh by then they probably won't want to promote me, as I'll be deemed too old to be worth bothering with, best years of career progression gone.

Crap for me. Crap for my kids. Also crap for the taxpayer who could get a lot more money out of me if I was allowed to take a promotion and move up now without LOSING take home pay so my children lose their home.

Yes exactly @Zoe303 . It's not even tapered. It's all or nothing and makes no sense whatsoever.

What I am, however, saying is that it is absolutely ludicrous, as some have done, to suggest that someone who decides not to work more at £100k because it will actually cost them money (and who is paying for someone else's benefits) is in any way comparable to someone not working much and cheating the system out of benefits.

^ This.

@ScruffyGiraffes I've read your posts on this thread and it's shit for you. Literally penalised for working very hard (no doubt) to earn a "high salary". The actual rich are not being taxed enough (nowhere near) so it's the high earning hard working but not rich who are getting slammed on tax and in turn not entitled to support (eg childcare).

My husband was offered 60k more because anything less than a 50k rise would have been a net loss. Employers head hunting professionals at this level know this. The government know this. How sick is an economy that at 50k pay rise - higher than the average salary results in a net loss?

The system is broken and the real earners who are paying for it all are at breaking point and saying - no more.

The actual rich are laughing as you tear apart the ones paying for your benefits and public services as they deserve it. These are the “workers” who have done well for themselves. The actual generational rich are laughing at us all and paying no tax while you demand more of those doing the heavy lifting at over 100% effective tax.

The net result will be the public services and welfare services will collapse.

Would promotion involve a lot of extra hours for you? If not (or if it's manageable), would it be worth just taking the promotion and stuffing the whole damn lot in your pension for now?

I know this wouldn't improve your current situation, but my thinking is that it would then put you on the path towards the next promotion or next job move which might get you over the point where it starts to make a difference to your take home pay (at which point you stop stuffing money in your pension like a crazy lady, accept the tax man eating that chunk, but at least start seeing some more money each month).

I think salary sacrifice for an EV would also be a way to pull it down and would improve your family life if you are having to get rid of your old car. Assuming your employer has a scheme of course.

I would. As long as you can go back ft when the childcare isn't needed if government allows for this then you're entitled to it.

I've read all your posts and I just wanted to say how utterly messed up it is for you to be in this situation.

As if life as a single parent isn't hard enough anyway! I'd never considered the tax implications but it's utterly immoral.

There do appear to be perverse incentives around income, taxation and benefits, as well as difficulties of being a single parent, that @ScruffyGiraffes has explained so well- never really thought about it this way before. Knew kids were expensive but not in this way.

However, once the particular pressures of early childhood are over- surely the benefits of a well paying career really do come to the fore?

Being able to pay into a private pension, affording better lifestyle for kids and family etc?

It shouldn’t have to be so punitive financially through taxation/ loss of CB/ free hours etc to bring up kids- but surely the “squeezed middle” can’t really complain about financial position given longer term prospects?

I think when you are looking at either a marginal improvement in income at best, or an actual reduction at worst then yes, it's perfectly reasonable to complain

Yes they can when they are paying for everyone else and can barely pay their own bills. A pension tomorrow (if you live that long) will not put food on the table today.

When the childcare over 9 months comes in this will happen a lot. If you’re earning over a certain amount, even maxing out your pension contributions might keep you over 100k so might as well structure it so you come under and get the childcare. So you’d think it encourages people into work but it’ll also encourage people out of it!

Would promotion involve a lot of extra hours for you? If not (or if it's manageable), would it be worth just taking the promotion and stuffing the whole damn lot in your pension for now?

I know this wouldn't improve your current situation, but my thinking is that it would then put you on the path towards the next promotion or next job move which might get you over the point where it starts to make a difference to your take home pay (at which point you stop stuffing money in your pension like a crazy lady, accept the tax man eating that chunk, but at least start seeing some more money each month).

I think salary sacrifice for an EV would also be a way to pull it down and would improve your family life if you are having to get rid of your old car. Assuming your employer has a scheme of course.

Thanks for the suggestions. Per this budget apparently now I could stuff enough from the next promotion up into pension without breaching the £100k of post-pension earnings and therefore losing tens of thousands in net pay and losing the house. We'd still get no more money as net pay from me taking the promotion which is what we desperately need and is not allowed, but as a stepping stone it might be worth it IF we could trust that the higher pension contribution allowances would be maintained while I was stuck in that situation. Then it might just about be doable - to get no more money now but put it into pension and just work work work for the next promotion when we might actually be allowed to keep some of the money in my monthy salary in a few years time followimg a second promotion.

But, if I took the promotion then Labour reverse the pension changes as they have pledged to, if in power in just over a year, those higher pension contributions would not be allowed, then huge cliff-edge effective tax rates would kick in for breaching the £100k threshold where we'd lose tens of thousands of net pay overnight. We'd be screwed and lose our home, even though on paper I'd have a higher salary than now, because I can't actually access any of that money as net pay because of this tax system. I just can't take that risk as the sole provider for two children, that politicians will just take our home away (for the crime of being promoted!). Although I suppose that'll happen anyway if Labour get in if they raise taxes further on anyone earning over £80k as they said previously. I genuinely have no more money to pay any more rises. There's nothing left. Labour don't seem remotely interested in equalising the tax system to give single parents the same allowances as couples, any more than the Tories are. Nobody is on our side.

We'd only be better off in terms of actual take home pay if I get two promotions, and I'd need another 4-5 years to get to the second one. I'd have to sacrifice yet more time with my children in what's left of their childhoods after they've been through a huge trauma already, on a hope and prayer that politicians won't reduce pension contribution limits again and by doing so make us homeless and bankrupt while I work for the second promotion. It's just too risky.

Benefits like EVs still count as taxable income so sadly that wouldn't help escape this cliff edge where if you hit £100k you are hit with an extra tax bill of tens of thousands of pounds, just for earning £1 more.

It is such a mess. I want to carry on with my career and do more for my children but until these tax issues are solved we are paralysed, treading water and desperately trying not to drown.

Thank you for your replies though, and to everyone who's been supportive. A lot of the time it's like speaking to a brick wall and nobody cares so it means a lot and I really hope more women will stand up politically to campaign to end the tax discrimination against single mothers, it does so much damage.

I've read all your posts and I just wanted to say how utterly messed up it is for you to be in this situation.

As if life as a single parent isn't hard enough anyway! I'd never considered the tax implications but it's utterly immoral.

Thank you. It makes no logical sense to me. It's bad for me and my children and also and for the taxpayer. As well as being morally wrong, I agree. We are totally trapped with no way out.

@ScruffyGiraffes I've read your posts on this thread and it's shit for you. Literally penalised for working very hard (no doubt) to earn a "high salary". The actual rich are not being taxed enough (nowhere near) so it's the high earning hard working but not rich who are getting slammed on tax and in turn not entitled to support (eg childcare).

Absolutely this. So many confuse people struggling on higher PAYE salaries with the wealthy. The idea of anybody referring to us as wealthy is a dark joke indeed. I have tried SO hard, and I'm now totally stuck and feel there is nothing more I can do except sell the car, cut our heating and food even more, and explain to the kids that there will be no birthday parties this year. And that next year is likely to be worse.

Thank you so much for reading and understanding.

It's not jusy early childhood. They need before school care, after school care, care when I'm away on business trips, care for 13 weeks of holiday per year when I have 5 weeks of annual leave. As I said they noth have SEN so can't go to group settings/ clubs so my childcare bills will be £2k+ per month until they leave primary school, at least. That's with the TFC discount we get btw, by me keeping my earnings just under £100k which according to many on this thread is "immoral" because I apparently don't need it. 🤣 If I earn £100,001 then you can add another 20% to that monthly bill.

I am not a single parent, but more in position of the OP- where I would have been eligible for 30 free hours if I reduced hours, and this may have made some financial sense in retrospect - however it would have only made sense for the brief period my kid were aged 3-4 and eligible for 30 hours free childcare - ie not in full time education at age of 4.

I really do feel fortunate and can’t complain.