Can anyone help me with the maths, nursery/work/life situation? Feel I’m going mad!

[greenhouseparling]

Single parent on 65k. Ex is involved, pays 50% nursery and 200 a month towards general cost. Since returning from Mat leave I’ve been on a 3 day week using annual leave. This runs out in March, when DD turns 18 months.

I am feeling anxious. I don’t like the idea of her there five days a week, I know she’d be fine but I would prefer she wasn’t. I also feel exhausted as it is so not sure I will cope with five day week work and being a single parent.

I can go down to four days a week for six months. Is this financially crazy? I feel annoyed ex doesn’t have to make financial sacrifices and his pension isn’t affected etc but mine would be if I cut my days. Just wondering if others have done this, maybe it’s not as big an impact as I’m thinking? I’m not great with maths….

you will be paying 40% tax and NI on the higher earnings . The first thing is to go onto the uk salary calculator site and put in your details and you will see what your take home will be . Then run your income and outgoings on a spreadsheet taking everything into account ( if you don’t do this already martin lewis site has a good tool) . You will be saving on nursery and travel costs as well .

Then do what’s right for you and your child . Best of luck .

Go on to a take home pay calculator and work out how your monthly take home pay will vary between 100% and 80% hours
Then work out the cost of child care for 4 and 5 days including the £500 a quarter tax relief from the government, your exP contribution and whether the drop in salary would qualify you for any of the child benefit.

I did this and found that I was £100 a month worse off for dropping to 4 days a week. My reason for going to 4 days a week from 5 was for my wellbeing and not for child care but I do have her at home on my day off. We noticed a huge improvement when my daughter went from 2 days to 5 days but minimal changes from going from 5 to 4 days.

So as the previous poster said, if you reduce to 3.5 days you will have a take home pay of 45.5k. If you put 10% into your pension via salary sacrifice you will bring home 40,500 a year which is £2676/ month. (EDIT - the 40,500 figure should read £40, 950 but this is just a general idea!) Excluding any bonuses). Add in child benefit and you have about £2800 a month.

Take away your nursery fees (just a guess approx 800 month with tax free childcare for x3 days a week) gives you £2000 plus your exes contribution (half new nursery fees (£400) plus £200) leaves you with £2600 a month. So you then need to do similar maths and compare to what you’ll have working 5 days! You also need to consider if your career will be impacted doing less days / hours and if you can’t condense 3.5 days into x3 the take home pay will be slightly less

Personally, I’d take the 4 days. Have one day at least each week where you do nothing but enjoy each other.

'I would prefer that she isn't' is not a reason for getting yourself into a situation you can't afford/being stressed over money.
You admit yourself she will be fine and thousands of babies across the country are absolutely fine. Why would yours be any different for just one extra day?

If you are in the UK you will get the hours towards your childcare fees as well when they reach a certain age.

I know DD is young but think ahead also could you spread your hours over 5 days when they start school so 30hrs per week. They also get 30hrs from 3yrs which will bring down your costs. It does mean holiday clubs etc but between you and her Dad you may not need much. It really just depends what you can actually afford. Search for PAYE and NI calculators online theres plenty out there.

Same, I do two 12 hr long days (could you do that when your ex has her?) and three 6 hr short days (finish at 3pm) to fit around the school run. Works really well for us, basically no childcare costs now DS is in school.

Can you do full time or 90% FTE over 4 days? So retain pay but one less day nursery

I have no input on the financials (and everybody above seem to have given lots of great advice), but just wanted to say that it's not fair for you to be annoyed at your ex.

Whether he was your ex or you were still together, this seems like your own decision based on you wanting to spend more time with your DD and/or her not being in nursery 5 days a week. It seems like he's willing to pay half the bills (in fact you've said you're not even going to tell him so he will be paying cluelessly) so he's not forcing you to work less - you're deciding to.

Obviously nursery fees are very expensive - is he paying half of 3 days at the moment, or half of 5 and/or will he up to pay half of 5 once necessary?

I would go back full time personally - you'll be less tired from not having to parent all the time. I take it he's a "every second Saturday" kind of dad so you're doing all the evenings etc alone? It is hard, I sympathise, but I wouldn't be messing with your financial future .

Following on from my post, if you stay full time and contribute 10% to your pension via salary sacrifice, you will bring home £58,500 a year / £3644 / month.

At a guess your nursery fees will be £1600 a month minus tax free childcare - £1450. £3644 - £1450 = £2194 plus your exes nursery contribution (£700) plus his £200 = £2194 + £700 + £200 = £3094

£3094 - £2600 = £490 a month better off for working full time (5 days nursery) vs 3.5 days condensed into 3 days nursery

(Note these are very approx calculations/ numbers that need to be checked and done properly!!)

Try to do compressed hours to work 4.5 days in 4 so it's less drop in salary and you still have a day with your dc and one less day to pay for. You won't lose much salary as that last half day is taxed so disproportionately

Don’t think of it as a financial decision more about whether you want to spend time with your baby more.

Also would dropping to four days mean you’ll get child benefit so under £50k? Not sure how it works if your partner earns over this though and you don’t live together?

I am in the same predicament. Going back to work october using annual leave to be three days a week until December and then need to decide in January whether to drop any days. It’s a hard decision.

I would drop the day.

No, I’m afraid not. The higher rate tax threshold is 50k, so if you dropped from 4 to 3 you’d lose another £13k gross, but that would be taxed at 30% (20% income tax and 10% NI), so would lose you £9,100 a year. You wouldn’t gain any more child benefit and I don’t think you’d be eligible for UC, but you would save a further £200 a month childcare. So while the first day off costs you £300 a month, the second would cost a further £560 for a total of £860 worse off.

The most tax effective point in your range is to earn a shade under 50k after pension deduction but before tax, then you make the most of the lower rate band and child benefit. That would be 4 days in your case. But it’s not all about tax efficiency, more about how much slack you have in the budget and what you want to do!

I dropped 5 hours a week and work 4 slightly longer days, with Wednesdays as my NWD. I love it because I never do more than 2 days of work in a row and it's nice having an extra day with my DS. Whilst it was never going to work out that I was financially better off doing it as I get paid more than nursery costs, the drop in money didn't feel quite as bad when factoring in the additional nursery fees being saved. In my case it also helped that I had a pay rise whilst on mat leave which covered most of the gap so the drop wasn't as noticeable.

I think it really boils down to whether you can afford the drop in salary. I'd start by working out what your salary would be if you were to drop x hours, factoring in any changes in tax bracket etc (there are websites which will calculate this for you), and compare to where you would be if you stay FT (ie your current salary minus half the daily nursery cost). Then consider whether you would be happy with the difference.

We've had to tighten our belts a bit to make it work but I am so glad I did it. I love my extra day off a week and can't imagine ever going back to FT now. Only you will know if it's the right decision for you though.

Just think about the future for you. Your pension will take a hit. When your child is 18 they won’t remember if they went 3 days or 5 days.

morning could you ask ex to have her one day a week so you both work four days a week. Why shouldn’t men be more involved I agree.

m I’m at the age where I’m looking closely at my pension. Having divorced I wish I had been tougher with my ex pulling his weight re childcare rather than my pension taking the hit.

Can you not go down to 4 days and start claiming child benefit?

Your income is taxed at 40% above something like £52k plus the NI and child benefit starts tapering at £50k. This means anything above £50k has the highest likelihood of not being worth it once you take nursery into account because of a high marginal tax rate.

The other calculation is nursery costs. If you can work 4.5 days in 4 or 3.5 days in 3 you're getting an extra half day pay with no extra nursery.

When I made this decision I made a spreadsheet showing cost of nursery and commute for 3,4,and 5 days and take home pay for 3.5, 4.5, and 5 days. You then compare disposable income at the end.

The other lever you can pull is taxable income. If you up your pension contributions or tweak things like salary sacrifice you may be able to get into the child benefit bracket without losing income. You can Google 50k marginal tax rate to get more detail, Bloomberg cover it Here .

Personal rant time: the current tax system is ridiculous for having variable marginal tax rates like this and I get angry every time I think about it.

@TheSeasonalNameChange it's even worse over £100k.

• Loss of personal allowance means a 60% tax rate
• Loss of tax free childcare
• Loss of 15 free hours

It creates a 100% tax rate on about £25k of earnings if you have two preschoolers. Crazy.

@MidnightPatrol it's worse than that, I'd be worse off from 100k to about 130k.

If I pay more in my pension to take me down to 49k a year then essentially I could work any days I like and still get child benefit? That’s only 100ish a month though, so 1,200 a year…

Yes it's only £100 a month but you would also have the money you'd paid into the pension.

If your taxable income is under £50k you get full child benefit. If your taxable income is between £50k-60k you get full child benefit but have to fill out a self assessment tax form and pay back some of it.
My partner earns in the low £50k after pensions last year and we effectively paid back 2 months work so were still 10 months up compared to not claiming at all. The form took a couple of hours to do but worth the time!

Don't forget if you claim you can get interest on it before you have to pay it back too