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!

Sounds great. Shocked at the responses.

In this economy people need to do what's best for them. If this works for OP and her family good for them. Sour 🍇

This is exactly our situation

In the current tax set up We will have a MUCH nicer family life and general existence by both working and earning less

Quite a few of our colleagues talking similar now- they really need to fix it!

In the short term (2-3 years) you will be better off. In the long term over the next 20-25 years you will be considerably worse off. Please think about your future prospects not just these awful punch years

*pinch years

Although it does feel like a punch tbf

We are close to but not at the limit. By the time our baby is old enough to qualify I suspect we could be in the same position, so was thinking about doing the same.

It seems mad, but what a better way to live.

Disgusting. I hope when your child no longer gets the free childcare, you can’t increase your hours and are stuck with less money.

Do people really think this will all actually happen as set out? The time line is
long for it to actually start and then be established and there are many issues with the whole policy.

One of them is the Tory party generally being shit houses and also a not too distant general election.

Risky making big life decisions around a policy that hasn’t come to fruition.

If you both earn over £100k, pay for your own childcare.
You are not 'the squeezed middle' as you claim, you are both very high earners.

Playing the system by reducing your income and expecting the government to pay this tiny rate to nurseries, who can then only afford to pay thier staff minimum wage to look after your child when you can well afford it yourself is just horrible behaviour.

Why? Assuming the OP and her partner have paid a lot into the system over the years as high earners, and are now taking steps to benefit from the way it has been set up. I’m interested to know why they is disgusting. Are high earners meant to just pay in at a much higher rate forever and never take out?

Fix what? If you and your colleagues can afford to and want to go part time then good for them and for you! The hours aren't as good as they seem really and no guarantee all settings will offer them.

A four day week is a much more healthy life balance, so what any policy should be working towards long term.

I don’t understand the anger here.

I was working 4 days a week when I first went back after Dc2. We didn’t have any free hours at first, she was about 1yo, and we paid around £1k per month for childcare . i was earning just under £100k at 4 days pw.

When DC got to 3 we were eligible for the free 30 hours because I earned under £100k (DH earns much less). Of course, childcare wasn’t entirely free because it only covers term time etc so we still paid a bit, but much less than when we were funding it completely. Particularly as the free hours could stretch further over 4 days.

Had I increased my hours when DC was 3 I’d have tipped into the over £100k bracket. We’d have lost the free childcare hours (worth several hundred a month), I’d have had to pay an extra day’s childcare, AND in that tax bracket you lose your personal allowance, so are effectively double taxed between £100k and £125k. I would have increased my hours, had less time with my Dc and have actually had significantly less money (after childcare) than I did on a 4 day week. So no, the extra free childcare hours (which does nearly cover a 5–day week of full time work) did NOT make me feel obliged to increase my hours when my DC was 3.

I was not wanting to increase my hours anyway, but as I am on a defined benefit scheme I wouldn’t have had the option of fiddling about with pension contributions.

I can’t see why reducing hours when DC is 3 is any more morally reprehensible than me NOT increasing my hours when I got some funded childcare hours, for just one of the 3 years my Dc was at nursery, and I was contributing as a higher rate taxpayer the whole time.

I don’t regard that as scamming the taxpayer and I think it is ridiculous that anyone would think so. As a high earner I am a net contributor and just like anyone else I can decide where, on the sliding scale of working more or less, I wish to balance my life. And so can OP. The hard threshold for childcare hours is a bit ridiculous, as is the threshold for child benefit applying to individual income and not household income, because it can disincentivise people from working more hours, but the govt can fix that if they actually want to.

As an aside, I do think working part time has affected my career trajectory but we made that decision for family and caring reasons, not purely financial, and it was necessary for us even with the negative impact it’s had from that side. But I would take that into consideration in making a decision as it’s not just about money now, as others have said.

So why are you doing it if you admit it isn't right and the government need to fix it?

I don't understand this mentality. Just because you can doesn't mean you should.

@Bucketheadbucketbum can you explain more about why this wouldn’t work? I have been looking into it recently so some pointers would be appreciated!

If you and your partner are both going part-time, you won't need free childcare, will you? You'll be able to look after your kids.

I’ve just been listening to talk radio dis siding the lack of childcare places for all the extra children requiring them. So just make sure you have secured a place before anyone gives up work.

*discussing

Shortly it’s only for a short window and then when childcare costs go down you’ll be worse off.

Well put.

People are not considering the nurseries in all this. They will not be in a position to offer this, the government funding is so low, nurseries already struggle to operate and pay their staff a fair wage.

Exactly.

It's ok to do what you need to do to have a decent life if you consider yourself the 'Squeezed middle' - not so much if you're lower down the scale and struggle to survive instead. Then you're a lazy scrounger who doesn't have aspirations.

What they need to fix - you can earn £99.9k and take home MORE than someone on £135k. This is a known and well publicised effective tax rate of over 100%. The chancellor himself as been told it is directly impacting on the economy. Why would you work for all that extra to be be worse off? Issue is - it’s these people who pay the most tax. Professionals such as Drs, head teachers, engineers: they are the ones paying the tax to prop everything up. It’s not the millionaires and billionaires who avoid it.

Effectively taxing people at over 100% is not only stupid - it lowers the tax take and results in lower productivity. As they chancellor has been told repeatedly. It’s short sighted that people can’t see this monumental issue. It’s why economics should be compulsory at school.

And this sums up what's wrong with the benefits system. It actually incentivizes people to become more reliant on the state rather than supporting them in becoming less so.

I don't understand. Surely if your OH is a high earner you could afford childcare costs?