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)

Um, I think you'll be fine. 🙄

What a ridiculous thread.

@OneLemonGuide you are assuming that I somehow what to keep “my money” to myself. I contribute exactly what he asks me to. If he asked for £50k or £100k or whatever to our joint account I would. So no abuse, he is not unhappy with me. If the rule was about “combined income”, he would probably feel differently about and would be more inclined to share the cost

@Cucy maximum respect to your journey, really inspiring to many.
The point is that childcare cost reduction only for part of population is difficult to accept, especially if that part is not only the less fortunate with money

Why not nurseries? I don’t get the logic that they should not be a public service

I agree with you there, early years education absolutely should be a public service, and should be properly funded as such. But it isn't and it is so extremely expensive that the government has had to have this patchwork system to try and help those who want to go back to work to do so without losing out too much.
If it was a public service free of charge for parents who earned 100k and below, then full pay beyond that, then I'd understand your position. But that isn't the case. It is extortionate, despite paying early years workers so poorly, and the few schemes in place cut the edge off a bit, but people are still paying tens of thousands of pounds per year per child. You're paying more (like I said earlier, less than £6k more than if you earned less than £100k) but you're making substantially more too.
So, complaining about the fact it isn't a properly funded public service? Yes. Complaining about the fact you consider yourself in the 100k trap? Be real!

Apologies, if you’d do as you say then you clearly aren’t abusive with money -sorry. But if you can casually drop £100k into your partners bank account, you’re part of a tiny, tiny minority, and obviously shouldn’t be getting a means tested benefit!

You might argue that it shouldn’t be means-tested, and maybe it shouldn’t, but where does that stop? We all need energy, so should Government provide that as a universal benefit?! And food too?
i mean, why should people be entitled to get stuff from food banks if you’re not?! You paid your taxes!

The government has drawn a line about what’s a universal benefit and what isn’t… we might not agree exactly where that line should be, but obviously a line that has to be drawn somewhere. But you’re not going to get much sympathy whinging about where that line has been drawn if you earn £260k and your DH also earns.

Thank you.

But why is it difficult to accept?

Will you/your DH be annoyed that your child can’t get free school meals for those with parents earning less than £25k a year, whilst you’re on £100k a year?

I don’t find it difficult to accept that there are many people who are on a lower income than me who get more help/more things for free because of their circumstances.

If you genuinely felt that you were being stung by being such a high earner then you would simply change to a lower paid job or reduce your hours.
But I don’t think you or your DH would want you doing that because you know you’d be worse off.

I’m not having a go at you, I can’t fathom why anyone would be livid for having too much money that they can’t claim benefits/free things.

It's not really difficult to accept. You don't plan to donate organs with the view you'll get some back someday. You just do it altruistically. It is the same with blood donation. When I was able to work, I was taxed at a high-ish bracket towards the end of my career for things I'll never benefit from. But I have used the NHS frequently. It's just life in a kind society. I'm not into these tax-evaders. You're missing the bigger picture.

He has to as you. That’s an imbalance of power. And he’s telling you he’s not ok with it.

But if you fairly shared the income, why would he be “livid” about losing the benefits? You don’t need them. Of course you should seek financial advice to maximise your income but I don’t get why you’re so fixated on these childcare benefits? They are for those who need the help. If your DH feels he needs the help then you’re not sharing your income properly as a family.

I’m not advocating for the system or claiming we live in a socialist state!
we both agree that the main pursue of taxation is to pay for public services , such as roads, hospitals, police , schools, etc. OP’s taxes help pay for those services which she uses.
She has a very high income so pays a disproportionate amount of tax. That doesn’t mean she is entitled to claim social welfare benefits. In the UK we have progressive system of taxation where wealthier people pay disproportionately more into the system and there are tax credits/ financial benefits for those less well off; this is to create a more equal society through the partial (albeit very incomplete) distribution of income from the wealthier to the less well off. Thats how our system works.

Because it’s not considered to be a universal benefit that children go to nursery until the age of 3 where research suggests that some hours at nursery might be developmentally / educationally beneficial (hence the universal 15 hours).

So we’ve gone from taxation is to redistribute wealth to partial.

Again I disagree. We have a system that means the rich stay rich and the poor for the most part stay poor. There is no redistribution of anything. It’s a system that allows the rich to stay rich by paying low wages safe in the knowledge that they will be topped up. Keeps the workers where they belong.

It’s absurd to suggest it’s a redistribution. It’s actually the opposite. It’s a system that ensures we keep wealth distributed unevenly.

She has a very high income so pays a disproportionate amount of tax.It

Disproportionate my arse!!

What utter rubbish - including national insurance on that salary you're not even taxed half of your salary. It sh

ould be at least 60 per cent in total of their salary (minimum) - then services could be properly funded.

At the moment she's having to live off £12k per month - along with whatever her husband earns. You're going to be squirreling a lot of that money away. Poor thing!! And she wants to have free childcare for a few years - nah not happening. And moaning saying she's paid for the services - no one gives a shit.

What about rich people who don't have children?? Should they be recompensed because they didn't use the childcare services? Well no - because that would be ludicrous.

But you do still get 15 free hours once your child is 3 as do all parents, irrespective of income so nurseries for 3 year olds are a public service. The 15 free hours is a universal benefit, the 30 free hours is means tested based on income. So you do get something for your taxes, just not as much as you think you deserve.

Pete’s sake that wasn’t a value judgement- I’m not saying I agree or disagree with how much tax OP pays. I was describing how the tax system works to a pp - we have a progressive tax system whereby richer people pay disproportionately more into the system (simply meaning they pay a higher proportion of their income) . Whether the system works well, or taxation is set at the right amount is an entirely different question.

Indeed, by the OPs logic, she needs something as a result of her having a child, so the state should pay, irrespective of her means to do so. But where does that stop? Free nappies? Free buggies? Free kids clothes?

It’s clearly ludicrous argument…

Or is it more a case of feeling hard done by? because someone else (who can’t afford to pay) is getting something that she isn’t (even though she can easily pay on £260pa). And that’s as entitled as the previous argument was ludicrous.

Because there are individuals earning more than him who qualify for this, there are households of people where both earn double his salary and with no pension top ups they get to qualify too…
this is not a benefit for people earning less than the average, the threshold is almost 4 times the average.

@Difficultquestionplz What proportion of the childcare does he pay?

@Cucy the free school meals has a threshold that makes more sense than £100k per person, with the option of contributing to a pension by 60k.
technically a household earning £320k (160 each) qualifies and unsurprisingly at that level of earning you can totally max your pension allowance.

Because there are individuals earning more than him who qualify for this

But they don’t have a partner earning £260k. I fail to understand what you are not comprehending here. You and your husband do not qualify for this benefit which requires that you and your partner each earn under £100k. The end,

Thank you for your responses.
turns out that 5 mins of conversation with generative ai resulted in a clear path to the financial outcomes I was looking for so I now have something tangible to run past a financial advisor.
turns out that the exact same question asked to a group of mums results in a small group of empathetic responses with good tips (thank you!) and a large number of people calling me abusive, predicting divorce, randomly insulting…

Did someone force you to have children? Your entitlement is off the charts. Why should the tax payer subsidise you when you earn such a huge amount? Can you answer that? Yes, you pay tax, so do I, but i don't have kids so I dont get any financial support, is that far? Should we all get benefits and really bankrupt this country?

No. You were not explaining to me how the tax system works. You were explaining to me what you think the objective of the tax system is.

You’re never going to win an argument that the tax payer is subsidising someone on this salary. For a lot of us it’s not actually just frustration that childcare is free for some and not others. Or that the ones who it’s not free are paying so much more. It’s the double taxation. That’s a bitter pill to swallow. I would be much happier if childcare was a pre tax allowance.