Avoiding the childcare trap

[Difficultquestionplz]

hi! I know there are a lot of high earners in this group so maybe other mums can help me. I am caught up in the 100k childcare trap.
back in the days when my salary was around the 100k mark, I was able to top up the pension, but that was before my child was born. Now my child has turned 3 and was hoping to finally get a little relief but it looks like it’s not the case…
currently my salary is higher, almost exclusively due to sales commissions and I am going to finish the fiscal at 260k. My husband is livid that he loses on benefits because of my salary and I am actually wondering if there is anything I could do in terms of investments that can be deducted that could bring me below the threshold.
I am not using any financial advisor because honestly when I looked into it they wanted to take 3% management fee just to manage the easy bits (pension, isas) and it obviously compounds.

thank you for helping
(please be kind, I don’t come from money, my job is paying well now but also highly at risk due to performance management or constant layoffs mixed with the joy of nepotism, unconscious bias/ blatant sexism of a male dominated environment)

Exactly.

I find it interesting that you are painting this as some kind of women's / feminist issue. I work in a traditionally male industry (law). I'm the first woman in my generation to go to university. I appreciate everyone has different experiences, but I basically feel like the breadwinner in my household due to my higher income (and longer working hours) and I don't feel like childcare is solely/mainly on me (actually my partner takes care of our kids a lot more than me). I outperform many men (and women) at work. Essentially, in most aspects of my life I don't feel discriminated against because of my economic and professional situation.

However, I appreciate that any women ARE at a disadvantage because they are low earners, and the lower household earner. I can absolutely see how that causes issues. That's not the case for you. So why is this a feminist issue for you? Your DH also has children (with you) and presumably (?) wanted them (even if he didn't, tough, he has to pay for them!). It sounds like you need to jointly benefit from your income, as well as be jointly disadvantaged (in respect of childcare benefits) by it.

I'm very happy to be told I'm wrong here and that this is totally a feminist issue but if not, you might want to reconsider your approach and recognise that you are actually in a very fortunate situation.

Well neither of you are seeing the money as being 'reliable'... The question is do either of you see the money you earn as jointly couple income?
If you both accept it's unreliable than come up with a joint plan. If you lose 150k next year the childcare element will become available to your family again. You won't 'loose' that if your financial circumstances change for the worse. Everyone who receives any state support that has an element of means testing knows that if income fluctuates the associated benefits do too.
You could create a plan that effectively banks the 150k as though it's not reliable income.
I still think you need to work out why he is 'livid' that something is being taken away from him and why it is he doesn't understand your finances are joint.

If you are worried about losing your job,surely the sensible thing to do would be to put a years outgoings into relatively easy access savings as a fall back?

Excellent question. The comment on being discriminated is related to my context and my industry. Mostly alpha bros, forming alliances in their inner circles. Usually educated in single sex private schools. Married to women who see staying at home as a status symbol (often the gp will pay for private schools). They set their mate up for success and oftentimes I need to clean up their mess at light speed to ensure over performance… I love my job and I am not bad at it, I just have to navigate an environment I don’t like because it pays me well but compared to what my parents did for a living I am extremely privileged for sure

This made me smile. Even if you think a bit negatively about my intentions

Sorry but how can you compare a traditional patriarchal relationship arrangement to a more modern one where 2 people are equally committed to work and family, it just happens that one is earning more than the other? And that the highER earner is not the man?

The taxes OP pays are for public services like schools, hospitals , roads, the police service, etc.
Financial/ tax benefits are for the redistribution of income and to support those in need.
They are absolutely not for people making £260k .

When women come on here because their husbands earn so much more and won't share, the men are rightly called financially abusive.

That is what you are doing. Your husband obviously doesn't earn a lot if he was relying on benefits, but you're not willing to share your salary with your own family. It's incredibly greedy.

Understand this, and I'm sorry you feel this way at work. However, leaving the working environment aside (which I don't think is really relevant in terms of whether you should have childcare benefits or not), your financial situation and ability to pay for childcare doesn't seem to be a feminist issue. Sorry but I think you need to take ownership of the situation and recognise that you really are very fortunate, even if your income fluctuates each year.

You could claim full childcare help with a household income of £198k.

So I would challenge that the benefit is redistribution for those in need.

Is it a benefit if you paid for it?

I think to be a proper family unit the fairest way is that all money is combined, bills is first priority, and then separate spending accounts so you can buy stuff without checking with each other. In our house our spending money is equal, although we dont have the same income disparity in the first place. In fact we both earn under 50k so I guess it's a pretty different situation. I can't imagine earning 6 figures and suggesting it isn't household income though

I just asked for advice on investments that will be tax efficient. Financial abuse is a serious problem, please let’s not throw it around inappropriately

I must admit i find the post a tad confusing, as it implies dh is claiming benefits, i though that was not possible

What on earth grounds are people using here to accuse OP of financial abuse? Ridiculous based on the severe lack of information given.

Because the principal is the same. If you are married, finances are joint. Be that two similar incomes, one income only, one very high and one minimum wage. If the household income is say 200k/ year, it wouldn't make any difference in my household how that split was made up, we'd both enjoy the same lifestyle and disposable income.

You shouldn't get married if you're not prepared to share finances.

No it doesn’t. It states clearly he cannot claim them because his wife’s earnings are so high.

But your intentions are negative, and you can't even see that! You're asking to benefit from a scheme that you do not need to make ends meet, unlike most parents who work in the UK.

For example, my household earns less than 100k per year. Let's say I have 1 child who is 3 years old at nursery and has 30h free, and we have the tax free applied. The full fee of nursery is £75 per day.
The 30h free are actually counted over 38 weeks of the years (terms only) rather than 52, so a lot of nurseries stretch those 30h free over 52 weeks and come to a total of around 22h free per week. That's 2 days per week. For those 2 days, we still have to pay for food, etc. in our nursery, that's £20 per day. That's because the funding the government gives for those "free' hours don't actually cover the totality of the costs for those hours (make it make sense).

So the total a week is 3 days at £75 + 2 days at £20 = £265 per week, so £13,780 per year for 1 child. With the Tax free, I pay £11,024.

If you don't get access to tax free but do access the universal 15h, you'd have 4 days at £75 and 1 day at £20 = £320 per week, so £16,640.

A difference of £5616 per child. Now that IS a lot of money, I completely agree. But, your household, OP earns almost £200k more than mine, so sorry, but for you to try and somehow hide some income so you can save an extra £5.6k is disgusting, as I said. Your situation is completely different from the 100k trap.

I don't really understand why you need to compensate your husband. Certainly you can take advice on how to manage your money well and proper financial advice is worth paying for. The thing is you earn loads of money so you can afford to pay for childcare. Sometimes we do actually have to pay for things. Funded hours isn't a universal entitlement, it's to reduce the burden for people who have less money than you do. From a funded hours point of view your burden doesn't qualify for reduction because you have a big income that can sustain the payment of fees. There is no burden.

If your DH is worse off than he would be if you were a lower earner and he could claim benefits, then yes there's a problem here. If you aren't prepared to instantly put that right, then yes that would be abusive, but I'm not calling you abusive because I'm assuming you will be putting it right. Or is he moaning irrationally despite being actually better off than he would be on benefits? You have sufficient funds that he should be significantly better off than he would be on benefits. Marriage means agreeing to share ones financial future equally, for better or for worse, you should have equal spending power, equal independence for financial decisions, equal ability to blow some money on something fun. Obviously you can decide as equal partners to put a significant chunk of earnings into saving and investments, and live on less, but those are owned equally whoever's name is on the account. How often do you say "it's not my money, it's our money"?
If you aren't ok with this, get divorced, you misunderstood the concept of marriage and shouldn't have started.

I have tried to rtft and it mostly seems to be an argument about what the tax/ benefit etc situation should and shouldn’t be, rather than focussing on what it is.

Bottom line seems to be that you’re way about this “childcare trap” and that’s that.

Your husband doesn’t really have the option to be “livid” with you for earning extremely well. It doesn’t sound like he earns badly himself!

The only thing the two of you can do is rethink how you share your finances between you - you are a partnership so if you need to share finances a bit more to make things fair then do that.

The op said 'My husband is livid that he loses on benefits', i read that to mean he was claiming and no longer can, so not that clear

Given that you say your DH is losing out on benefits due to your income, are you a) paying him the equivalent or b) not?
Clue: b would be financially abusive behaviour.