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)

I think 'Rage Bait' is the correct term - the 'OP' first posted at 5 am - and ain't coming back....

The 15hrs are universal.

Give your a wobble op. You're ridiculous.

LTB!!!!!!

Someone earning over £260k trying to cheat the system to get benefits is like someone dipping their hand in a charity donation box to buy themselves a coffee but to the tune of £1000s. I wish Labour would grow a spine and introduce a wealth tax. The absolute entitlement is disgusting!!

Thanks - I am slightly amazed at this and have gone down a rabbit hole of googling! Benefit in kind paid instead & schemes generally not that good value, electric cars a bit better - but still.

Learn something every day.

Thank you, to you & to all the other posters (I'm fairly certain there are going to be many! Which is fair enough) for update/correction 😊.

I’m not sure why you’re getting so much abuse OP, all you are doing is asking for financial advice.

You can still claim 15 hours, but you aren’t eligible for the extra 15 hours plus tax free childcare. Now - that ‘loss’ as you aren’t eligible might be worth ~ £6,200 a year, or ~£12,000 pre tax.

At £260,000… your options are limited, and I’d query the point of taking serious avoiding the £5.5k.

Now - at £260,000 you could put 3x years pension allowance away and still claim. But of course you can’t access this money for 30 years. Depending on if you think your salary will rise - you will lose tax relief on pensions from this point on so stuffing your pension now not a terrible idea.

With one three year old I personally wouldn’t bother at this level (albeit fair to feel aggrieved you don’t receive it). If you’re planning on a second child, I’d save pension allowances for them, as the 30 hours a year from 9 months is potentially twice as valuable for you, if that’s important to you.

If your husband is earning a lot less… are you paying for a lot more of the childcare anyway? That would be fair, and is what we do.

I don’t know why posters get so angry about people asking for financial advice - OP will be paying 50% tax on her income over £100k due to removal of personal allowance plus removal of childcare support plus 45% rate. Anyone would look to optimise their income in that position.

The greatest error with the free hours etc was just excluding the top 1-2% of earners, its universal bar the people paying about 30-40% of all tax. Is it any wonder they’re annoyed.

ODFOD

On the bright side OP, you must have repaid your student loan by now. 😳😂

Because they pay tax, and it’s reasonable that they should have something in return for that. Or are you saying the NHS shouldn’t be available for those earning too much? Or that high earners should be charged by the Police if they’re a victim of crime?

Having said that, I think the OP’s. being grabby and should just suck it up and be happy she’s well within the top 1% of earners.

Can you explain why your husband is livid? What exactly does he feel he’s missing out on? Do you feel you pool resources enough? He shouldn’t need any benefits with your salary. Sorry I’m just really confused!

@OneLemonGuide the short answer - yes - they shouldn't have anything paid for by the state because they're loaded.

However means-testing is obviously complicated to administer and is not going to happen for NHS or police.

Sounds legit 🙄

I don’t get this at all. I know someone on min wage, around £23k, who can’t claim UC as they are widowed and there DH left them a fairly small amount of life insurance (less than op’s wages and under 100k). Why is there so much angst about someone earning over this amount a year not being entitled to state funded childcare benefits?

@OneLemonGuide If a poor single mother didn't tell the authorities she had a new partner so her benefits wouldn't be cut, she'd be labelled a benefit theif. But if you're rich you can commit benefit fraud with a few tax avoidance tricks and have people calling it a right! Benefits are a safety net! They're to help struggling parents not bolster the income of the rich!

It is not the same as having access to the NHS, if you want to know what someone who earns £260k gets out of tax it's that they live in a country with such obscene wealth/income disparity that you can earn more than a paediatric brain surgeon and rocket engineers salary combined in careers that do little for society but line pockets of the rich.

"My husband is livid that he loses on benefits because of my salary"
Your household is not 'losing out' - you simply don't need them. Benefits exist to raise low-earners to a minimum level, a level that your household far exceeds.

Your problem is not your finances, your problem is your husband. Why is he livid? Why does he feel so entitled? What is he contributing to the household pot? Why are you twisting yourself to the shape he demands? Is he controlling? Would he rather you had no earnings so that he had more control (you said "he loses", not 'we lose')?

Talk us through his irrational response to you being a high-earner. Let's discuss your actual problem and find a solution to that.

Not a lot of sympathy for your husband unless you’re financially abusing him in some way and he sees no benefit of your salary, but yes, child-related benefits should be universal in my view.

You’re now going to have hundreds of posters who are not net contributors getting cross and telling you you’re the entitled one - don’t let them get you down.

I will get my tiny violin out. Your poor husband

It’s intentional.

Perfect response. What on earth is society coming to. You have more than enough to pay for childcare. Get a grip.

Wind up..... now off you pop to pick felicity up from the night nanny

I don't think this is real. You are just trying to get in the Daily Fail.

Did you not do your calculations before having dc? As with any group in society if you can’t afford dc and maintain your lifestyle without benefits then don’t have them / as many.

Thank you, this was my question.
what benefits is your husband trying to claim?? How are
you affected by the 100£k trap when you make £260!!!

Righto