To be angry about the new "free" nursery hours

[pimlicopubber]

We're not eligible for the new "free" hours starting at 9 months, because my husband is lucky enough to be earning over 100k. However, I earn far from that, so 2 sets of nursery fees are more than my salary. We live in London with 2 small children.

We are comfortable, but don't splash out, we shop at Aldi and don't own a car. Our salaries basically evaporate after paying rent and nursery fees, yet the government is treating us like we are the Kardashians when it comes to the marginal tax rate.

As a result of the "free" hours that don't actually cover nursery costs, our nursery increased fees for everyone, because they need to cross-subsidize the free hours. Also, the ratio of caregivers dropped from 1:4 to 1:5 and we can't move to a slightly cheaper nursery further away, because they have incredibly long waiting lists due to the huge demand. I'm thinking of quitting work, even though it will be damaging to my career in the long term.

AIBU to be disappointed and angry that a policy that was supposed to motivate people to work has an opposite effect for our family?

That is the whole point, it isn’t always choice….you may have bought years ago when there were areas in zone one that were very undesirable….and the stamp duty costs of moving make it prohibitive.

I have no issue at all with paying tax and would be happy to pay more if there were services available. The knife edge reduces the public funds as people put money into pensions or work less…..and let’s not forget it’s the higher earners that prop up everything……

sadly it seems to be the politics of envy at play. We need high earners as much as we need business etc, the crzy high levels of tax don’t help.

Thanks for all of your responses! I fully expected the negative ones and I understand the 100k number seems massive.

To answer some questions/comments:

1. "Get husband under 100k" My point exactly, it's wrong that people are motivated not to work and put their money away for 30+ years in order to increase their disposable income. It's as bad as motivating low earners not to work but collect government benefits. Sadly, husband can't work part time - he needs to be available 5 days per week. We'll look into the pension contribution options. We always contributed the minimum amount because we don't entirely trust that we'll even see the money at some point, especially with the pension age increasing all the time.

2. "Why should the public purse should subsidise childcare for the rich? (=you!)"
   If salary w/o nursery fees was considered, my husband would have the same disposable income as someone childless on a 34000 gross salary.

Forgive me if I can't help feeling bitter subsidising childcare for everyone else twice over (60% marginal tax rate+ higher nursery fees and higher child/caregiver ratio), while having no chance of gaining any sort of support during what are the most financially taxing years of our lives. What else are we going to exclude "the rich" from, how about the NHS? Or schools? Maybe we should pay an extra fee to use the sidewalk?

I'd be very happy to pay nursery myself through a tax relief scheme, that way, no one would need to contribute a thing to us.

3. "Cry me a river - I'm on 7k/20k/ disabled, suck it up, how dare you complain! No one cares if you can't afford your (whatever that we don't actually have - car, mortgage, expensive holidays)" Fair enough. I'm not saying we are hard off, but we're definitely a lot worse off than people on much lower salaries outside of London and the government in London THINK we are. We are literally sucking it up, I didn't ask for any advice.

I feel bitter because the government is treating us like cash cows, while we are squeezed from all sides. Between rent, nursery, fees, university loan and food, there's very very little left at the end of the month. This is not a race of who's "worse off". You don't need to tell me if you can't afford a dentist and we can (unless it's a crown, who can afford a crown?). The actual rich are mostly those who are "asset rich" (ie our landlord, who bought our flat for peanuts many years ago) or have really big incomes.

4. "Why is the nursery fee come from your salary only? You are a team. It's sexist to assume the woman has to stop working"

Indeed, we work as a team, so as a part of budgeting, we add up our salaries together. It's not the case of "the woman" staying at home, rather than the lower earning one staying at home. The math is simple: if the lower earner (I) stops working, we'll have more money left over. I have a female friend who is an extremely high earner (like 180k) and her male partner, who has an NHS job, is the main caretaker for her children. At her salary level, you are usually expected to work very very long hours and she also travels lot at a short notice. Notice that I'm NOT saying that other people who earn less are NOT working long hours. I applaud teachers, doctors and other professionals who hold very important and hard jobs, that are not paid well.

5. "It's your fault you have an expensive mortgage, it's a lifestyle choice./Paying 2500 in rent for a 2 bed? Get a mortgage!" No, we can't buy anything close to suitable in/around our area for this sort of mortgage payment. We have very low savings, as my husband only recently started making great money that get sent straight to the landlord and the nursery.
   Living in Zone 3 in London can be considered a lifestyle choice, we want to live within a good commutable distance to central London, as my husband works very long hours and a longer commute would be a killer. All of our friends live in the area (sadly, our previous rent was much more affordable, I regret not settling down in a cheaper area when we moved some years ago). We also have a girl and a boy, so a 2 bed flat is not something we plan to stay in forever, and it might not make sense to buy a 2 bed just to move in a few years' time.

6. "Free childcare is only for those who can't afford to work".
   This here is literally ME. Unless you count my husband subsidising what amounts to an expensive hobby as "being able to afford to work"

7. "Finally someone mentioned single parents" - absolutely agree with this comment! Single parents have it the worst. It's impossible to work with 2 kids as a single parent. The limit should absolutely be per household!

Sorry if I forgot any main themes, happy to contribute later!

Actually, I completely agree with this. It’s a new system we need.

Nope, those of you earning in the top 5 % incomes who tell others that its not a lot and that you should get benefits, often complaining that you'd be better off on benefits are the spawn of the devil.

Bet you all were fine with benefits being cut to the less well off.

In general, the government should stop discourage people from working, regardless of their salary. From the tax perspective, it is actually worse to discourage a high earner from working full 5 days per week, than to discourage a low earner from working at all.

A minority of people will change their working habits. Most won't.

It will have limited impact on tax revenue, especially as in a lot of cases someone else will do the work that one has chosen not to, and pay tax on that.

No I've worked there and dealt with it first hand. Lots of staff with young children choose to work weekends and nights to get paid more and have family to help at those times. You could say that about any occupations. Everyone needs health care which is a sinking ship. People shouldn't keep having kids they can't afford!

"People shouldn't keep having kids they can't afford!"

Every advanced society supports people having children, we need people to have more in fact.

I'd be very happy to pay nursery myself through a tax relief scheme, that way, no one would need to contribute a thing to us

Feel free to petition both your workplaces for this then, there are private pre tax salary sacrifice schemes for nursery bills.

Dealt with what first hand? The withdrawal of the free hours that you're advocating for hasn't happened yet, so you won't have experienced it. The fact that some people work outside of standard nursery hours doesn't answer that question either. Nor does your belief about who should have children.

Also it’s totally farcical that all these higher earners are suddenly going to withdraw from the workforce due to a relatively very short period of nursery fees, less than 2.5 years without the 15hrs. Not are they suddenly working part time because very few jobs in the 100/120k+ range will be doable on a pro rata basis.

Ultimately OP, your situation is very temporary. You've not said how old your kids are, but in 2-3 years at least one will be in school and the other one about to start. I've three kids in nursery and it's a killer - but I just think about how rich I'll be in when they start school! The bottle is half fill! (Unless you are one of those poor parents who can afford private schools by sacrificing shoes, bread and water, and won't even be able to afford that when VAT comes in? There's plenty of other threads for that...... :))

No, I am not going to apologise, you made plenty of rude (jealous?) assumptions yourself, are you going to apologise for them?
why do you decide that people “don’t need them”? The OP literally explained that she needs free childcare hours as otherwise childcare is more than what she is able to earn. Because the nurseries upped the prices for everyone because of the “free hours” (government pays only £4.5 an hour to nurseries, less than minimum wage).

as to your understanding of progressive taxation, did you miss key information that a couple earning under 100K each (so potentially earning 199K) WILL be entitled to free hours, but a family like OP where one person earns over 100K, and another one like 5K, so with 105K, will NOT be?

No there aren’t. Same eligibility criteria

www.gov.uk/tax-free-childcare

Yes I noticed that. And I’ve said it’s wrong. You were incredibly rude to me, suggesting I’d deliberately warned as little as I could to take benefits from poor rich people, when in fact I’ve worked incredibly hard as a full time teacher and seen what real deprivation looks like. I didn’t earn £100k because classroom teachers don’t. Yet somehow they manage to afford child care - in my case with no free hours at all.
I’ve also said I think nobody should pay, it should be funded through taxation as schools are. You probably think that’s a bad idea too.

A government tax free childcare account is not the same as a private salary sacrifice scheme I mentioned.

www.workplace-nursery.net

This! plus forgetting all medical bills etc paid for (the slight contributions are minimal) and whatever bonus he gets at year end which will be 10s of thousands of pounds the average person won't get.

If you can afford very expensive rent and an expensive nursery, bills etc and still have money left over then you are definitely not poor. However, I think funded nursery hours should be based on a joint income of both parents.

Probably should have thought about the cost of having kids before you... had kids.

I honestly don't see a way out of childcare until secondary school. The schools are constantly off, you don't get enough leave to cover that time off. My daughter is off 32 days term time, 11 half days and then 2 months summer. You give up childcare, you have no cover for those endless holidays the school take plus they finish at 2-3pm and start at 9am, most jobs finish at 5pm and start at 8-9am with a commute in there to make it in on time. Most of the after school clubs also close on those holidays. It's such a headache and not designed for working parents. Most people also cant afford to cover everything on one wage so you are trapped every way you look.

Except a functioning society needs younger generations to pay taxes and support the older generations. Otherwise society begins to fail (take a look at South Korea’s current panic about low birthrate). So essentially parents are subsidising society by paying for childcare.

That’s why a lot of other European counties have universal childcare - they acknowledge taking care of the younger generation benefits everyone.

Life isn’t fair OP.
How do you think many of us feel that never got any free hours? Some of us only have one child because that’s what we know we can afford.

No I actually think it’s an excellent idea and that would be fair AND will benefit everyone

Except the OP isn’t talking about ‘life.’ She’s taking about a government policy, which, in fact, should be designed so that the impact is fair and equitable. Which is not the case here - this policy has been poorly conceived. And I say that as someone who benefits from it.

Aren’t these also closed to new applicants?

www.gov.uk/help-with-childcare-costs/childcare-vouchers