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!

I think they should just remove the caps around income.

and the tax system should be overhauled. Far too much burden on income tax, bring CGT in line etc

Actually, I'm going to be more specific, in case it helps anyone else in this situation - by "cut hours", my first choice isn't to go part time, just in case I can't get my employer to increase my hours again when my children are at school. Instead I would use blocks of unpaid parental leave (which everyone has a statutory right to - 4 weeks per year per child, up to 18 weeks per child total) to keep my income below £100,000 until my children are at school.

@RedemptiveThursday I would do the same

I no longer have young children (ages 16 & 19) I earn circa £150K (NHS) I see about £600 a month more for than I did earning £110K (< 100K after pension) and now need to do a self assesment. I regularly ask myself if it is worth it.

I'm very much team 'OP should work as much or as little as she wants and can afford', but to be fair that is such a niche situation - very few people are going to have two preschoolers at once for more than two years (and I'm not quite sure where the saving of £1000 a month per child from the 30 hours is calculated from, as that's a lot more than it has saved anyone I know, including me).

It was taken from a childcare costs survey, I think probably based on what you would have to pay to replace it. It is London where average nursery costs are very steep.

But even if you have two parents and one just tips over you still get that cliff edge drop. With one child then it's not so steep but it's still dramatic.

There should never be a point in the tax and benefits (in the widest sense ie healthcare, childcare, education as well as monetary benefits) where an increase in income leaves you with less in total than you had before

@Dyslexicwonder snap though not NHS. I’ve changed my pension contributions post the announcement to put in the full £60k per annum. If tax was less punitive especially the £100 to £120 I’d probably put in less but no one is going to address that so when I can I’ll maximise what I can do to pay less tax.

She’s perfectly entitled to it. It is not a welfare payment.

Also, to the comments along the lines of ‘it is disgusting that they work less while we pay for it’ that’s absolute nonsense. OP and her DP are net contributors and still will be. Even after reducing their hours and availing themselves of the free childcare which is there to support parents who work (not specifically low income families). So no one is paying for them. They are still paying for lower earner families who are not net contributors, who are being supplemented by the state, some of whom will have made the same decision not to have both parents working full time. Also perfectly acceptable.

@Bratnews

Exactly, then when you retire earlier, the Treasury will be annoyed that someone with lots of skills isn't incentivised to work longer, because you have a big pension 🤷‍♀️. If they let you earn more now, you'd be more likely to work for longer!

My 3 year old's preschool (a local authority one) costs £11 a day, which is £8.80 after tax free childcare.

If I only had 15 free hours, and no TFC, because I earned over £100k, it would be £36.50 a day.

Monthly difference for March 2023 (23 days) would be £637.50. So not £1k, but not insubstantial (and that's the difference for just one of my children, and doesn't account for the loss of the personal allowance).

If I had no entitlement to free hours or TFC at all then it would cost me an extra £1,224 a month (£1,426 total, against a current total of £202) for my child to attend preschool.

These are the kind of figures that impact of decision-making!

Yeah, this. ^ I often find the ones shouting the loudest about how it's 'disgusting' that someone's living at the taxpayers expense, are the ones who pay the least tax, (sometimes no tax.) They are just deeply resentful of people working less hours than them, having a better work-life balance, and spending more time with their children, family, and friends.

Bitterness and jealousy is what it is. Often because the bitter jealous people themselves can't afford to drop their hours because they're not hugely high earners. As I said, they don't pay much tax anyway, and cry off about how they're 'keeping' people like the OP and her husband... LOL no they're not, the tax the naysayers and haters pay, is paying for shit for THEM. The OP and her husband are working 7-8 days a week between them anyway. What's the problem? They'll be earning their keep! (And very likely paying as much tax as some of the people slating them!)

@HalfWomanHalfChocolate

Exactly. And the economy is struggling to find enough OPs in many sectors. She has likely worked very hard to acquire the professional skills that earns her a big headline salary and does need to feel as if it was worth bothering for.

That is excellent advice. Luckily we always knew we could increase up to full-time later.

👏👏👏 Well said

I’d love to know how much tax is paid by all the people shouting about how ‘disgusting’ this plan is?

Go for it OP.

This is a great visual.

I don't think the moaners understand we pay tens and tens of thousands of pounds in tax every year, and have dome for decades.

We paid in tax far more than anything we could ever possibly use (over a million easlily in our careers to date) and actually our net income is less more than it would be if we earn a lot less!!! Now we have kids we are thinking- what's the point in this! Working 70h weeks for what?

It's the f you you're loaded we deserve it keep slaving you don't deserve anything attitude that makes one think you'll take yourself and our tax contributions abroad! Good luck to the moaners then!

*our net income is much less each month than it would be if our salaries were lower

This is a really good idea, thank you I will see if its an option

I guess it's very individual - the (fantastic, a bit but not very above averagely priced for the SE commuter town we live in) nursery we use costs £386 a week for a full-time place with no funded hours (£77 a day - I'm guessing your preschool doesn't offer a full working day?), £262 a week if you have full 30 hours funding. It's a big difference of course but it's nothing close to £12k a year per child and I really don't know anyone who has ever saved that with it.

It just worries me a bit because I keep seeing woman, from right across the economic spectrum, talking about the decisions they're making in light of the childcare announcement and so many of them seem to be predicated on the idea that the 30 hours of free childcare is literally that, but unless there's a sea change in funding it won't be any more than it is now.

To be honest it's not so much about the childcare now, although that was the final straw, it's more about the tax cliff edge .

We've reanalysed our situation and just can't get away from the fact we are working harder, for less.

What's the point in life? We could be dead tomorrow and if we are net net net worse off financially working more, why wpuld we choose to spend less time with each other? And to have a more stressful existence? Our lives will be monumentally more enjoyable if we both cut our hours, and we will be better off financially!

We will still be paying tens of thousands in tax so not sure what everyone's problem is- how much tax do you all pay? How many hours do you work a week? How much time do you get with your family? How much stress does your job cause you? How long and how costly is your commute?

Would you really do anything differently? Really. Honestly. No you would not.

OP I don’t know whether this in an option for you but if you can buy additional holiday via salary sacrifice that may reduce your income a bit. I can buy two additonal weeks in my role. I am expecting a pay rise that is likely to push me over the £100k cliff when taking into account my bonus so I am looking at options to keep it under.

@HalfWomanHalfChocolate it bemuses me when people resent high earners taking out from the very system they put into. It’s not a bad thing; it’s equality and with nhs, schools etc it can mean key opinion formers have a knowledge of what it’s like for the masses. Anyone remember the posts years ago criticising Katie Price for using council transport for her son Harvey who was at a special needs school? Comments like, she should pay for a private driver?!

anyone paying into a pension, criticising the OP and yet benefiting from the tax/ni break is clearly paying the difference back then, no?

anyone who is a SAHP or on reduced hours is depriving the nation of tax?! Crazy logic.

What's the point in life? We could be dead tomorrow and if we are net net net worse off financially working more, why wpuld we choose to spend less time with each other? And to have a more stressful existence? Our lives will be monumentally more enjoyable if we both cut our hours, and we will be better off financially!

Completely agree with this! For me I ended up sort of glad that the tax system works as it does as it made our decisions to go part-time easier and much more financially possible than we first assumed (I assumed that I'd be considerably down by dropping a day but with the reduced tax and the cost of that extra day of childcare it worked out even), but I appreciate that we're at a different place on the tax scale - and we're not on a cliff edge - and for us it was a very active and welcome choice.