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?

No, childcare vouchers are not the same thing as a salary sacrifice. Childcare vouchers are no longer open as a scheme, I suppose the nursery workplace scheme is a new version.
It’s the same concept as a company car or another perk, your employer pays your nursery bill and then it comes out of your pre tax salary. It therefore not only reduces the nursery fee but also lowers NI etc.
Essentially there is an incentive for employers to provide a childcare facility on site for their employees, where that can’t be done (obviously in most places it can’t) they can take your childcare bill pre tax and allow you to use a nursery of your choice.

People are very quick to bring up other countries that have universal childcare systems, however comparatively they also have higher levels of taxation.

You cant moan about not getting enough state benefits while supporting a lower tax system.

And for many of us it has not been “fair or equitable”. Except you want to make assumptions.

My partner was on a visa and which exempted me from any benefits! No mat leave. No nothing. My partner was convicted on DV related charges and suddenly I was paying for the only childcare I could find. I had zero free hours and when free hours were available there were no places. There are a lot of policies which are unfair. There are a hell of a lot of entitled people. Lots of people didn’t choose to be in the situation they’re in and they make the best of it and try to figure out how to make their life better. Then there are some that complain about how unfair their situation is. Honestly the latter annoys me. There are plenty of people worse off. Has the complainer always voted, educated themself about what they’re voting for? Gone to their MP’s surgery or written to them? You know what I did when the system failed me? I wasn’t crying to an audience of people that are a mix - many who are worse off or never had help and can’t benefit from the mentioned policies. No I did something about it. And a baroness read part of what I wrote in the HoL. I’ve written. I’ve spoken on industry round tables. I’ve partaken in research projects to amend policy to better protect women.

So forgive me for having no patience for entitlement to benefits when the woman isn’t that bad off compared to many.

Issue is there though- comparatively our higher tax payers are paying their fair share, it’s everyone else that isn’t. A higher earner in those countries will pay the same and get the universal benefits. Here? It’s more and more and more to allow the majority to take, take, take and not contribute their fair share. 30% basic tax rate for a start and the majority work.

You might be surprised - comparing the UK to Germany for example, the tax differences aren’t as stark as you might think for someone on £100k

United Kingdom
Gross salary £100,000
After tax £65,780
Tax rate 34.3%

Germany
Gross salary £100,000
After tax £61,740
Tax rate 38.3%

So about £4k difference (aka 2-3 months of childcare in the UK) for a country with free childcare and an excellent and accessible healthcare system.

Can you do salary sacrifice to pay for nursery out of pre tax income?

how much is your salary op? I see your dh's salary.
how much are nursery fees for 2?

yes, you are right to regret not settling down in a cheaper area years ago.

Yes but only if your employer offer it as a benefit, the same way they can offer salary sacrifice for a bike, offer gym discounts, private health insurance etc. You can’t use it independently.

www.enjoybenefits.co.uk/staff-benefits-savings/workplace-nursery-benefit/

This! It has been introduced to help couples on lower or average wages to work, not for high earners who are considered tobe able to afford the costs. As with any initiative there will always be categories who are left out, usually very the rich and very poor.

Not relevant when you are comparing a country that doesn’t offer universal early years childcare either.
Some posters keep bringing up countries that do offer universal or close to universal childcare and taxation is higher in those countries, for obvious reasons.

It’s higher because more people work and more people pay higher rates of tax. Our highest tax payers pay a similar amount. It’s everyone else who doesn’t. That’s the problem. We need much higher taxes across the board or people to actually work. Not languish in low skilled jobs all their lives because UC.

Hmm, it’s hard to be sympathetic when your household earns vastly in excess of the national
average wage. DH and I are both in senior professional roles but in the public sector and so we earn approx. £68k gross jointly. Back when our children were small enough to need childcare, the 15 free hours didn’t kick in until the term after the child had turned 3, and for one horrendous 6 month period over the summer we had two children (just turned 3 year old and an almost 1 year old) in childcare full time. We just used up our meagre savings and then gradually slid into debt as we knew it wouldn’t be forever. Bearing in mind we had already been paying full time childcare for our eldest since he was 6
months old. Eventually I took the tough decision to go part time and essentially halt my career progression in order to reduce our childcare bill but also to be there in the afternoons for the children once they started school. We will never earn your level of wages, and yet have never been eligible for any benefits (other than non-means tested child benefit of £130 ish per month). So I would rather the free childcare hours went to people on lower to mid wages who really need them. Sorry, I know it’s not what you want to hear. My BIL and SIL are in a similar financial position to your family, and they complain all the time about not having enough money, but they go abroad at least once per year, eat out, buy unnecessary stuff, and to be honest they don’t budget so spend loads on food and groceries etc. Is cutting back spending a potential solution for you, or have you already done that? Could your husband drop to 4 days a week and you up your hours to bring his wages under the £100k cut off?

If he’s just over - we got an accountant to look at the figures and then a salary sacrifice electric car to take us back under. With the tax free childcare and ‘free hours’ for both our children - the car saves us more than we spend on it.

I agree it’s totally crap - outside of london - with them in 3 days my experienced nurse job is nursery fees and food shopping. I find it really insulting!

(It has to be fully electric because they’re taxed differently!)

Do you not realise that they are tax payers too? The 100k earner makes significant tax contributions.

I think you might be confusing a private pension with a state pension. If you contribute more to a private pension you will get it all back including investment returns and you can access it from 57 (as of 2028). So it’s really just a tax efficient way of saving. The state pension age is much higher and is more of an unknown quantity in that they could means test it, reduce it etc. yours private pension is yours and accessible at quite an early age.

I have worked both in labour and high earning professional jobs.
I think those the working class parents should not get taxed at all if they have kids under 3 and the same for other earners upto 50k tax free.
The money saved on tax should be used to fund childcare.

When did the ratio go from 1-4 to 1-5?? Do you have evidence of this please?

Evidence

No it’s not in in social housing and my two bed rent is £1430 where I live in south London average rent is £1000 a week!

I do think that is crazy. It should be household income, to be fair to everyone.

There is a " workforce crisis" because Labour PM Tony Blair threw open the doors to the Eastern European accession countries allowing them all immediate entry to our workplaces, rather than the gradual assimilation of those workers practiced by Germany and France.
Thus UK employers have grown used to a flexible & cheap labour force rather than spending time and money training British workers.

Once the low wage rot has set in, it's then difficult to motivate/incentivise business to start spending more on training our own.

And that's why nobody in power really wants to stop the illegal channel crossings given eventually they'll be a constant source of cheap labour!

So workers wages will remain depressed and the poor will get poorer as the per capita GDP shows.

Perhaps a solution to childcare would be to regulate that all businesses with above a specified number of employees must provide on site nurseries and the Government offer tax breaks to those businesses for doing so. Several businesses could also pool childcare facilities, say with the nursery sited in one area on an industrial park. Childcare could even become a perk of the business to retain good staff.
It would also get more bums on seats in the office and perhaps the Civil Service back at their desks so we get stuff done and the Country functioning again.

Get financial advice OP on diverting some income into pensions to fall below the threshold. However if you want decent Nurseries and good staff wages, someone will have to pay.

I have family in London in a similar situ. And my advice to them is to relocate. It isn't ideal but with changing times needs to be flexible and adaptable. If it is no longer workong out for you financially then move. Other parts of the country are much more affordable.

As someone from immigrant grandparents (1960s). I can assure you that they also have aspirations and wish to better their lives and careers.

I worked in recruitment for a while and your statement is not true. I found a lot of "foreign" people had a better attitude to work then British born aka non foreign.
In my line of work I seen it time and time again. Recruitment from abroad 80% of the time yielded better outcomes. Those trained in the UK and none foreigners were the first to leap ship and wanted things beyound resnoable and were well, wet blankets. They didn't want to do the dirty work just the glamorous roles.

I can't specifiy what line of work I was in.
But wanted to add my own experience. Opening the doors to immigrants has saved the UK. My grandparents were invited over as nobody wanted to do those jobs. They worked hard made a good life for themselves and contributed back to the country. Never abused the system like some others even those who are English.
We can't blame one group for the downfall of the country. It is a collective 1000%

Well as a team they will financially be better off having the op not work, how is that a good thing?