Wife is the higher earner

[Notsureanymorepri]

Husband has a decent salary (£70k gross), in the last 2 years my income has grown to 500-600k (mainly due to variable compensation) from around 110-130k. we have always split all expenses 50-50 and kept our finances separated. we have a relatively frugal lifestyle. No debt, mortgage paid off. The cost of nursery where we live in London is £2.4K/month for our only child and due to brexit he may have lost 10 years of pension contributions abroad so is in catch up mode and I agree this is a priority. he now feels under financial pressure at the prospect of booking holidays and did not sleep for days when we found out that the results of the state school we were aiming for have plummeted and we MAY need to consider private as an option in 2 years…i have spoken about me paying for the holidays or me contributing more to the joint account but he doesn’t seem keen. What options could I suggest to make it seem fair that we adjust our lifestyle a little bit if reasonably affordable at household income level without making him feel bad about himself (I am proud of his career and he does have an important job) please?

Not sure I understand your point: nature, art, culture are relatively inexpensive to experience. Being present in the moment is free. If it’s about holidays, hopefully the answers here will help unlock the dilemma

Don’t forget your pension allowance is now only £10k. You need to ensure you’re not over paying and then boosting your DH’s instead, plus ISA’s.
Junior ISA’s maybe pensions too.

Speak to a Chartered IFA (ensure they are indeed independent)

the thing is that he’s now contributing half of his salary into his pension to make up for the years lost. Part of me is in denial that his contribution for the years worked in Europe have disappeared, that they did not negotiate something to protect those who worked there and then here…

We've used an IFA for many years it's served us well.

Thank you. Yes I am aware of the reduced allowance. He is maximising his allowances by himself. Not sure about the junior isa - the child’s freedom on how to use it when the time comes seems dangerous or is there a way to ensure responsible spending?

But you lose stamp duty + 1.4% EA fees + solicitor fees + removal costs + new property set up or renovation costs.

On a £2million property - which is really quite small in London - stamp duty alone is 150k.

The total should cover 1 set of school fees for the whole of secondary school

Your DH can do £60k per annum into his pension.

No the downside of JISA is access, but education is key here. Personally we save into our GIA’s and will gift that at the right time. CGT has clearly made this less attractive, but it’s preferable to full access. Depending on numbers ISA’s and pension commencement lump sums are an option.

How this interacts, cashflow, IHT etc is all for a good Independent Financial Planner or IFA

To be honest, we have not looked into private primary schools much, so I may be misinformed (I assumed it was mostly bankers, bright kids from humble backgrounds on scholarships and some families passing intergenerational wealth tax free🙈). I find it hard to accept that we pay so much in taxes and then have to go private for quality essential services like education. And I hate even more that by going private we segregate society even more…

Oh noooo @Notsureanymorepri half his salary! That is tough!

I think you need a financial adviser to sit down and look at everything in light of your increased wealth so that you can plan effectively. And so your husband’s mental health can improve.

The current status of him having £25k a year in hand trying to live the lifestyle you have is liable to send him into a nervous breakdown.

Regards the private primary school - you couldn’t be more wrong. I went to private and my parents were both teachers. Some of my friends send theirs and they are a mix of nhs profs, teachers, civil servants and finance. And you also get people who work in trades like plumbing/roofing, as well as many other business owners.

People from all walks of life prioritise education.

In private you will get smaller class sizes so more individual attention, greater resources and extracurricular activities, generally better behaved, well mannered kids (though some are spoilt and bratty). Some choose it for the purposes of networking in that their children mix with the “right” people therefore opening up employment and social opportunities later on (it’s not what you know but who you know).

If you have a spare quarter of a million it’s a pretty good investment for your child.

You're now paying 2.4k a month for nursery 29k per annum. You don't object to that expecting free childcare. You're going to be better off financially when your child goes to private school than you are now.

This is MN. It should be separate finances, but he should/must match you pound for pound for what ever you want to spend. Anything else is financially controlling of him. Once you have spent him dry all your remaining funds are your to spend as you wish.

Clearly if roles were reversed, all money in a single pot as anything else is financially controlling and fails to respect you.

Hope this helps...

Couldn’t agree more. You don’t need to live a materialistic life in order to have good memories or to enjoy yourself.

also, when a large proportion of your income is variable comp and hence uncertain it makes sense to not go mad and blow it all because it might not repeat again in later years…

Actually private school costs more when you consider that class finishes at 3pm and you need to pay for wrap around care whereas nursery runs till 5/6/7 pm.
but that’s beside the point, is it fair to have a two tier education system where people who can afford 30-40k a year per child buy a better standard of education than people who cannot?

I don't understand your question OP. Both of you have loads of money. In two years' time you'll have earnt well over a million quid. Why are you stressing about money and shopping on vinted?

@Kisskiss how would it? Average cost is £15,500 a year. The most expensive being £50,000 a year, but there are only a few of them.

The fairness of it is neither here nor there, if you did away with private schools you would still have pseudo private schools where parents price others out of housing in the catchment area and then donate to said school to ensure the kids have more advantage.

So you might as well let the schools stand. A lot of the kids go on to be high earners and donate more back in tax so I don’t necessarily begrudge the private investment.

I don’t know of a private school that ends at 3pm, possibly in reception, bit thereafter it’s 4pm.

My issue with the system is if your parents can’t afford it, you’re already starting out one step back. That’s making sure the poor stay poor. It’s better to give all children a chance to earn those high wages than have your child remain poor and pay less tax

on the fees: all the private schools I looked at ( London and surrounds) are 25k and up. My Dh’s friend just started his daughter at some place that’s 45k a year…

Yes I’m referring to reception.. 3pm and then one hour later after… so the OP will need to pay for wrap around care given her job probably doesn’t finish at 4pm. Unlike when her child is at nursery and she can do pickup after work ends…

@Notsureanymorepri I agree with your caution about junior Isa's and freedom for DC to do what they like come turning 18. My DC have money due at 18 that we legally have to hand over control of then, but another sum we don't have to (it's complicated, I won't bore people with why). But in your shoes, I would tie myself to legally having to hand over any savings/investments until you're happy to. Given your current income, if you haven't already, it's maybe worth speaking to an IFA to make sure you're doing everything you can to use your current income to secure your financial future?

@Kisskiss

Ok so OP is going to be looking at paying more due to her location. Earning an extra £250k this year is 5 years school tuition on that basis. So she would need to bank or invest safely her extra earnings of 500k from two years to be able to pay for the entire education (interest will cover the other 4 years, plus associated costs).

I mean what else is she going to do with all that money, buy handbags and a yacht?

It’s obvious that anyone starting off in a school that isn’t private will be on the back foot. But there is nothing you can do. People will always be motivated to give their children the best they can afford and to have them mix in certain circles only. And whether or not the private schools are there they will still attempt to achieve that aim.

At least with the private schools there are scholarship opportunities to give some a chance.

If you are blocked from attending due to not being able to afford to live in the catchment area there is nothing to be done. They aren’t going to set up social housing on a street where the average house price is 800k+.

I grew up in a country with a very high standard of education and a one tier system, everyone has state subsidised education till age 18.
yes they have the catchment area system too however, all schools are ‘good schools’ meaning each school has the same array of sports and activities and a similar calibre of teachers. It’s not totally perfect- parents cram private tuition down their kids throats but at least you removed the great barrier of “better” expensive education for the rich and rubbish for everyone else.

@Kisskiss

Finland? If so, yes it is excellent in all regards.

However, wouldn’t there be disparity between those who can afford tuition/better extracurricular activities outside of school vs those who can’t?

In the U.K. system I think people are so conditioned, even if you changed the entire structure it would be difficult to obtain true equality.

It’s a long time since my kids were in reception but afair they did 4pm Mon-Thurs, 3.30 on Fri. But the schools all have wrap around care 7.30-6pm.

Great, why not start your own thread about it rather than hijacking someone else’s.

Finland's entire population is 5.6 million, London alone is well over 10 million. The Finnish population is also very homogeneous while the UK is very diverse. So comparing them against each other needs to take into account these differences, and most likely many others.