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)

This Is definitely a wind up post.

Well said.

I haven't had anywhere near enough coffee yet to add anything that won't get me banned

I have so little sympathy for this. Childcare isn't a permanent expense. When you child goes to school you will still earn a huge amount. I really really cannot see why you can't suck the costs up. Some people just genuinely don't understand how society works.

I’ve read some things in my time on here but fuck me this takes the biscuit

Possibly one of the most entitled posts I've ever read on Mumsnet!

I would recommend you shop around and get a financial advisor to give you proper advice (and i’d also suggest finding a new husband)

What on earth have I read?! Unbelievable really.

“Im rich as fuck, but how do I make it look like im not rich as fuck so I can claim benefits”

The £100k threshold is a bit dumb but you’re so far over it’s not really a problem at that income. If this is true, at that salary you suck it up and don’t moan about it as we did when my husband was in that position. If you’re sensible you’ll already be putting more into pension than some people’s annual salaries most likely with generous company top-ups.

You’ll still be getting 15 hours and soon you won’t be paying at all unless you go private for schooling.

And yet next year when your child turns 4 you’ll happily pay tens of thousands in private school fees for the next 14 years.

What an excellent idea, ask on MN for free financial advice, what could go wrong?

Can you explain this to me? I’m not earning anywhere near that so haven’t looked at the calculations.

What do you mean by effectively paying 80% tax on earnings over 100k?
Can you break down what that looks like?

I think childcare bills can shock higher earners (who are often in highly capitalist professions and from a right-of-centre political background) because it is often the first time they encounter the significant economic costs of providing a service where the benefits are almost entirely social and intangible. In the case of higher earning men, this also often taps into ingrained sexism whereby the work of caring for young children has, in their prior experience, always been seamlessly taken care of via the unpaid and unacknowledged work of women, generally their own mothers. Childcare is female dominated but these women (nursery workers, nannies or childminders) actually need paying and set out a contractual obligation to do so!

In other parts of life, a higher earner will pay a high bill and get something tangible or experiential: a house, a car, a piece of jewellery, a holiday or a special event. This fits perfectly with their existing belief frameworks around capitalism, work and reward. They pay the bill and receive the benefit. But childcare bills don’t tap into the same reward system. Pay the costs of a day of childcare and the benefits are vitally important, but are either intangible or cannot be seen for many years: safeguarding, care, enjoyment, learning and development…This is also beneficial to society as a whole, which is why it is significantly subsidised by the state (although not nearly as much as it should be). The only immediate benefits to the parent are reassurance and being freed-up to work or do other activities. So an un-subsidised childcare bill will outrage someone like the OP’s husband because, I suspect, he doesn’t truly value what is being received and it is at odds within his political and economic beliefs.

I write from the perspective of many years of observing the political discourse around early childhood education and care. And from witnessing many a high-earner (generally men) unreasonably complain about the costs of childcare!

People using the words parasite or entitled should know damn well that these words very well apply to them in this context. At £260k, she has no personal allowance and is in the highest income tax bracket. She IS the taxpayer, she IS one of the few million people who are actually contributing towards government funding so she should damn well be entitled to it instead of financing it for the rest of you lot!!
Otherwise the logic becomes, the more someone works, the more they earn, the more they pay taxes and the less they should be entitled to any public service, it’s ridiculous!!!

Tricky one. If I were you I'd quit the job and claim UC. Not only will you get up to 85% of childcare costs reimbursed, you'll also get free prescriptions and school dinners. I also heard something about goats and flat screen TVs.

So… I agree OP is far over the point where taking any avoidant action to claim childcare hours makes sense.

But… in terms of ‘how society works’, I actually think the childcare hours have created a situation whereby 1-2% of the highest tax payers are excluded from (while funding) a universal benefit, and that has made a lot of people question ‘the social contract’ of their paying so much tax.

I’m happy to pay loads of tax. Not so happy to pay loads of tax and have to fund otherwise universal services though, because the government has excluded 1-2% of people from accessing them.

This. Sorry

@Difficultquestionplz we were in exactly the same situation about 30 years ago. Nursery vouchers were withdrawn, no tax credits, or benefits of any other kind.

It was simply because we earnt too much to be eligible for anything or they simply weren't available.

May I gently suggest that you belt up, and providing yiur dh has no disabilities, he cracks on and gets a job to make up any perceived shortfall.

Your husband needs to give his head a wobble.

And he can claim benefits. All he needs to do is divorce you and go it alone. Problem solved.

@BadSkiingMum that's a really interesting perspective on this. And would also account for the relative amounts of tax relief you can get for childcare (which maxes out well below the actual cost of childcare) or health or medical insurance vs tax relief on leasing a car via work.

at that level there is nothing you can do OP. But it shouldn’t affect you as much as someone in the £100-£125k bracket, as your overall average tax rate will be lower than those who are in this trap.

You want your cake and eat it too, hey!!!!!! 🙄🙄🙄

• you want to try and hide, essentially, some of your income so you go below 100k to gain some tax free childcare and free hours
• you don't want to use a professional financial advisor, because God forbid you should have to pay for their work

I agree that it isn't fair that couples who both individually earn 99k could have access to those benefits but if one of the parents earn 100k they can't, but your situation is way beyond that.

I'm sure you work hard (we all fucking do!) but you earning 260k and still want to try and con the system to get even more money! It's disgusting, frankly.

Wtf have I just read?

Why? You know it's not free? It's heavily funded BY THE TAX PAYER and takes money away from other things.

Erm… in case this post is genuine…

When you receive your bonus, whack it in a separate bank account and explain to your dumbass husband that you can use your earnings to pay for childcare. With a little
bit left over 😉