How to afford this?

[Inahoole]

My income is 2,984 after tax. Full time nursery is 1300 a month after the tax free part. Rent is 980, car needed for work daily is 145 a month on finance. I have gone through calculators online and can’t see I’m eligible for any help. I do have 9k savings but this was my deposit for buying a home in the next couple of years. I feel so worried about this, I don’t know whether to go part time for a bit or use savings for nursery? What do people do in this situation? I had no idea nursery was so much and assumed it would be 500 ish a month, I know I luckily have options but not sure what to do? My ex partner lives abroad and sometimes sends 100 quid but it’s not something I can rely on.

OP have you tried using a website like entitledto.com? Obviously I don’t have all your information (ie age, post code etc) but a basic calculation showed you would be entitled to some UC per month and you can then claim back a chunk of your childcare costs too. They wouldn’t require you to regularly sign on or anything as you have a really decent income but it would help you out a lot?

Reduce your hours so little one can do a cheaper nursery day (or find a childminder) and claim UC until they go to school. If the school offers wrap round care you can increase your hours again and, if you're smart, can maximise your pay to hours work to child care spent ratio.

The car is also unaffordable. Use some of your savings and buy one instead of having one on finance.

Put it this way, if the money from 2-3 days per week is solely going on childcare, then the would financially be better off going part time as there would be a few less days to pay for and she may end up in a lower tax bracket which could also help out.

I had to go part time (not claiming any benefits) as I was taking less home working full time after childcare was taken into account than if I worked part time.

Op, look at childminders. I used one when my children were young as it was around £400 a month cheaper than nursery then used nursery from 3 year old when the free hours kicked in.
The other option is compressed hours so do 5 days work in 4 days if it’s possible so you’ll only need childcare for 4 days.

You can't have savings if you're in debt btw.

Of course you can have savings if you’re in debt. I currently have a loan of about £5k and I’m paying interest at around 2%, I have a similar amount in savings but I’m gaining interest of just over 5%. It doesn’t make sense to pay the debt off.

With the limited info provided, OP is in the standard tax bracket so unless they only worked a 1.5 day week would be unlikely to drop a tax bracket. There are lots of far more sensible things OP can do to reduce outgoings, without gaming the system and putting the burden on other workers - changing childcare arrangements, paying off car finance using savings, moving house, compressing hours…

I’d love to know where you can get a loan on 2% interest! I used to do a fair bit of flipping, but in recent years the interest on savings is far less than the interest on borrowing so no longer viable.

A childminder is a cheaper option.

Honestly can't believe how many people don't check nursery costs before having a child .

, if the money from 2-3 days per week is solely going on childcare, then the would financially be better off going part time as there would be a few less days to pay for

You need to work on your maths! OP earns more each day than the childcare costs. If she works less, she loses more money than the childcare costs. How does it help?

Will get far less loaned as a mortgage though, if you go part time like posters are advising.

Will get far less loaned with huge outlays in childcare too

Don't be ridiculous, it's not this attitude that is fucking the country, it's the system and its failure. If OP will be better off working part time then why shouldn't she? Would you choose to work more hours, see your child less and earn less money? Really?!

It shouldn't be like that but if it is, then it is.

Childcare in the early years is, unfortunately, expensive.

I think most people just cut their expenses to the bone (fortunately young children don't need to cost much), cross their fingers that no big expense comes up, and try to get through to the free hours stage when the cost substantially drops.

You won’t get any universal credit with savings over £6k

The problem is short-sighted selfishness. If OP reduces her wages it will reduce the amount of tax she pays, and other people working will have to pay more tax to enable OP to pay less tax and to claim benefits. You really can’t see the correlation? Let’s extrapolate your attitude to everyone on a high salary reducing their hours to pay less tax and other outgoings in order to either reduce their tax burden and/or claim benefits - who is going to fund that? There has to be a balance of enough people earning to pay taxes to keep the treasury balanced, and in recent years we have more people taking than giving, which is part of the reason we’re in this mess.

You also don’t seem to see the knock on effect of earning parents reducing their hours to save on childcare; fewer childcare places will be required, so fewer childcare professionals will be employed, meaning fewer people can get childcare and go to work, and tax income reduces because fewer people are working… the butterfly effect.

This is horrendous. A large part of the problem (on top of expensive childcare that all people with small kids have to contend with) is that single parents are heavily penalised through the tax system. OP is paying more tax than a household with the same income and two working parents would pay, so has nobody to split childcare/ drop offs/ pickups with and needs more childcare AND has to fund this from lower net earnings because she's taxed more.

Most other comparable countries, including even the US as well as other European ones, do not tax people in this way to compound existing disadvantages. Any competent Government would address this straight away not only because it'd be fairer but also because of the huge economic benefits it would bring generally: reducing child poverty, lowering welfare reliance for women all the way through to old age, higher tax revenues overall because fewer people would be forced to cut their hours or give up work completely.

It's massively unfair OP. You're already trying to do the roles of two people in only 24 hours per day not 48, and then on top of that you have to pay more tax than another household with two adults and the same income.

It's £16k

Childcare costs come to a massive shock to all of us. There are a few years where unfortunately you have to suck things up somehow - whether it is working less to cover the childcare or paying eye watering amounts for childcare.

If you can come out of it with your head above water you’ve done really well. I’m afraid those savings might have to take a knock in the short term, but these years will pass.

this is what is wrong with the system. Someone out working full time should not be crippled by nursery costs. Working parents should get more help with nursery costs.

Can you use salary sacrifice on your childcare costs?

16k is the old system - I think it's 8k for UC

There is a horrible middle ground where you are considered too well off for state help, but too poor to actually manage.

I was in a similar situation op, only not single, our joint income was similar to yours. We weren't entitled to any UC and had too much in savings, I seriously considered trying to get rid of some of it so that we might be able to claim. In the end family came to the rescue, otherwise I really don't know what we would have done.

The only advice I can think of is go to the citizens advice bureau, they should be able to properly go through your options for help, if there are any

• I think with your rent and childcare costs you'd be entitled to universal credit. Certainly worth applying. Copied and pasted the below regarding your savings Any capital/savings you have under £6,000 is ignored.
• Any capital/savings you have worth between £6,000 and £16,000 is treated as if it gives you a monthly income of £4.35 for each £250, or part of £250, regardless of whether it does or not. So if you have £6,300 in a savings account, £6,000 of it will be ignored and the other £300 will be treated as giving you a monthly income of £8.70.
• If you have capital/savings worth more than £16,000 you will not be entitled to Universal Credit. This is the same if you are a single claimant or are making a claim as a couple.

So 12 x £4.35 reduction per month for your savings.

Have you claimed child benefit?

@Youvebeenmuffled Theres been no further info yet, it’s due at the end of November allegedly…

@aswarmofmidges It’s still £16k on UC. Above £6k begins to reduce your entitlement, over £16k stops your entitlement.