DH and I going part time to deliberately reduce wages

Higher rate tax payers contribute more than most people getting "free" childcare. Good on the OP.

It’s a shame that you’re only inclined to go part time and therefore look after your children most of the time rather than using childcare in order to save money. Surely, the decision should be based on what’s best for your DC - paid for care or parents doing the care.
if between you you’re dropping 3 days of paid employment you’ll only need 2 days childcare. Most childcare providers only allow so many hours per day, so you won’t actually get 30 free hours. At my DGCs nursery it would work out at 6 hours free per day. She goes from 7.45 - 6pm twice a week. That’s 20.5 hours. Her parents would have to pay an additional 8.5 hours, along with all associated costs (meals etc). Plus it’s term time only, so 39 weeks.

Go for it!

Not only financially better off but more time as a family. What's not to like?

And what of the single parents earning £100k, with small children in childcare? Taxed as much as a couple who can have one parent at home! Half the tax free allowance, higher rate tax imposed at half the household income, child benefit withdrawn at half the income, as are funded nursery hours and "tax free childcare" and the personal allowance.

Usually to earn that much as a lone parent to try to provide for their children with no state help they will have to be living in the SE so at least half of that net pay taken up with mortgage/ rent, and another £2k on childcare at least. End up even earning £100k having only £1000 or so left to pay council tax, food, commuting, utilities, and no help with nursery funding although they obviously need more childcare than a couple who have 47 hours per day to split earning and time with children between them. Yeah, living it up, big time. Rich. 🤣🤣🤣 And faced with over 100% tax rate if you try to work more or seek a promotion to get more net pay to cover the inflation. You have NO CLUE.

Oh come now, self sacrifice for the greater good is a ridiculous expectation to have in the current economy and society.
It worked in prior generations because the entire climate both economically and socially was entirely different.

Whats coming through now is an entire generation of workers (20-40) who have been told at every turn that they are on their own and not to expect anything handed to them. Funding their own pensions, insane housing markets, ‘your kids are your problem don’t expect help’ 😂 mad Inflation, general disdain from generations above.

But you want them to somehow feel some massive moral obligation to support society 😂 … good luck with that 👍🏻

Totally agree with you.

I didn't know about the £155K losing tax benefits on pension contributions. Can you explain that a bit more please? I am about to get a promotion and whilst I am not sure what my basic salary will go up to, it's likely to go over this. Will I lose all tax benefit on all of my salary sacrifice?

you can't really expect them to keep working full time out of the goodness of their hearts and donating their entire additional earnings to the state

Why are you painting high earners as indentured slaves with guns to their heads? People can work where ever they like.

I struggle to get behind your stance when you’re trying to paint high earners as people who’ve ended up in that position through no fault of their own with no personal benefit. Just don’t take a job at those salary levels if the tax and sums don’t work out personally for you but don’t pretend the situation is anything like those earning average or below wages whilst trying to piggy back on policies that should be better ringfenced for them.

(full disclosure - I pay for childcare, work, live in the south and DP, at least, is a high earner).

This is a great point. I wouldn't be making any concrete plans based on policy promises that the sector think aren't properly funded, and that come from an administration who are going to be out on their arses in no more than 22 months.

Exactly. Economic insanity. And anybody reliant on UC or public services should be the people campaigning hardest to get this fixed because those things simply won't be funded if the people paying for it are taxed 100% and obviously will then cut down work and stop providing that tax revenue. It amazes me how the green eyed monster stops people being able to see basic facts even when it's this obvious.

I know so many people in higher paid jobs that work 4 day weeks because after a certain point the take home difference is negligible! If tax is taking 40%, student loans another 10%, NI another 3.25%, pension another 10%. Add on benefits you're no longer entitled to, several are same or better off dropping. Better work/life balance is worth it.

Do you actually have kids yet OP? Because the whole thing won't be implemented until September 2025 (if at all in my opinion) so it isn't going to have any effect on people that have kids now. Maybe newborn babies? I think I'd be waiting until I actually saw the governments plans in practise before I make big decisions about work.

Well said

That would seem odd. It is worth about £5k for the difference between 15 and 30 hours? If you both work full time you get 30 hours unless you are over £100k

If you earn over £100k then dropping 1-2 days each would be way more than what you would save. Even allowing for the £120k tax pitfall.

High earners can of course access the same social safety nets as anyone else should they need to. Need being defined as you are unable to provide for yourself.

Ask yourself if you would work more hours so that the state could take 100% of the extra income you earned from doing so.

It's all well and good asking the opinions on here but ultimately it's up to you op. If I had the chance to be better off working part time I'd probably do the same

When I was a single mum I worked full time earning 40k. I paid £450 a month in rent.
so I dropped to three days a week and earned around 26k a year and as a result was entitled to all my rent of Of £450 being paid. So ended up better off by reducing my hours. I’d have been made to stay full time

It's just scamming the system. Again.

The amount is 38 weeks x 15 hours at about £5-6 (£5.67 in some London brought) an hour. That is all you would benefit. 570 hours at say £6 an hour- even increased by 30% it is 570 hours x £7.80 an hour.

My DH is considering paying more into his pension to fall under the earning limit for our next child due. We pay shit loads of tax! A full time nursery place is £500/ week, so £24,000 a year, out of net income currently as we don’t qualify for tax free childcare. £100,000 a year is not a fortune in an expensive part of the country.

People don't "take a job with those salary levels". They work their arses off to get qualified and skilled enough to earn that money.

I worked 90-100 hour weeks throughout my 20s. I am now a lone parent, and damn right I should actually get more net pay if I sacrifice time with my children to work more hours. Why would I work more and have even less time with them to give 100% of the extra money I earn to the state to fund other people having more time with their children while mine spend even more time in childcare? Nobody would do that.

If you want to productivity and funding available for public services and benefits to increase then it needs to be worthwhile for the most productive workers in the economy to work more. We don't mind paying more than everyone else and subsidising others - even though I'm a lone parent I don't mind this. I won't, however, work more when the state will take 100% of that money. Or actually even more, we'd end up worse off than now.

This is very true, and I say this as someone on the left.

We currently have a labour shortage. If we want people to work, we have to make work pay, which incidentally requires more than just the stick while we abandon the carrot. This is relevant at a wide variety of income levels because there are bottlenecks across the spectrum. The calculations the OP makes aren't too dissimilar to the ones my parents made twenty years ago about tax credits, or that people in my community make now in relation to UC. The principle is the same.

20 years ago I earned £14,500 per annum and paid £15,000 in full time childcare for my twins. I was a single parent and, with tax credits, my gross income was around £20,000.

I fully support making it easier for people to work by providing free childcare, but hearing someone say they’ll reduce their income to £198,000 to take advantage is, frankly, sickening. This is supposed to help the poorest in society. Here we have extremely wealthy people lining their pockets to the detriment of the nurseries, and the quality of care they can provide for the children of people who desperately need good childcare so they can earn 10% of what the OP and her husband do.

People seem to be forgetting that free childcare only covers ‘school hours’ i.e. 9.00 - 3.00, so paid for wrap around care is necessary for most working parents. I don’t blame OP at all if she can drop a day or two.

@BashirWithTheGoodBeard exactly. There is so much research on it. Even the Guardian recognise the issue per my link upthread! We are not talking about rich people here. We're talking about the net contributors who we ALL need to work more for the economy to recover because they're the ones holding it up. This issue applies with the bottlenecks at £50k and £100k and also with universal credit tapering. It's the same issue: if it's not worth you working more because the tax is too punitive, obviously you won't. People need to drop the green eyed monster and step back and think "what would make the economy function better?"

Surely it's obvious nobody will work more if it makes them poorer to do so?!

It's not rocket science. People will make the decisions that benefit their family.

The tax system is dysfunctional. The Government commissioned research that told them this and how to fix it. They didn't. Labour have no plans to either. Therefore everyone will continue to get poorer.