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)

Does anyone have any data on how many wealthy people do actually leave? It's always trotted out but I've personally never seen anything to back it up. I've know lots of extremely wealthy people and none of them actually do fuck off to Andorra and take their money with them. I think it's an idle threat tbh.

This is ridiculous. You're on 260k and want to claim free hours?

Is this thread real?

Here we go, finally the point comes out - you’re married, why on earth are you paying for all the childcare? Why on earth do you have to compensate your husband? You’re a partnership, money should be shared. Into the same point and then divided in two.

i don’t think I will, last thing I want is for my child to grow up in a bubble with people who are scared of mixing up with “lower” social classes

Ffs come back when you're paying childcare for 2 kids on two average wages with no childcare subsidy (Northern Ireland)!

Well exactly. If this was reversed some people might be calling financial abuse that you potentially won't help your DH out with his part of the costs, or resent doing so when your salary is so high.

You say you're worried about losing your job or your salary dropping.

If and when it does, benefits will be there to catch you.

On that salary you could put your annual earnings into a high interest account and the interest will probably go a long way to covering what you would have had in benefits..

This!

you have a £1/4 million+ household and your husband claims means tested benefits and you think you shouldn’t share your money with him? And you won’t spend a few quid getting proper advice from a trained professional on how to help you hide your wealth (I mean make you more tax efficient)? OP I think you may have seriously warped ideas around money, probably stemming from childhood. Pay for therapy as well as a tax adviser.

is any high earner actually doing that? the one pot and then everyone takes out what they want/need? I don’t think it’s practical, you would need to discuss every spend or investment decision…

It’s not happening on mass. Because the government is sensible and knows not to push it too far because that will happen. So they don’t.

Then move to Sweden and pay a lot more tax for this kind of society.

Oh you poor thing, I'm so sorry to hear of your struggles. I work full time in a professional job earning under the national average salary. I know it's not much but if you send me your bank details, I can send you a tenner to help you out during these difficult times. Can you speak to your health visitor and see if you can get a foodbank referral?

60k to pension, 100k to charity and you're sorted

Your husband needs to earn more if he wants more.

Or, you divorce and live separately and then he's fine. By his standards. Apparently.

It would be a major turn off for me if my partner was whining about losing his benefits. I would tell him to up his game.

I genuinely don't think it would happen.

This. I was reading about this and it's over £100K but if you make £150k in London you are out of the childcare trap.
While these are large sums I do feel a little for families who are effectively paying £50K per year for childcare, in an ordinary nursery i.e. not private school.

I’m sure Donald Trump wouldn’t want to give upon his financial independence in a million years, either.

thank you. 10 years of therapy, best investment of my life and one of the biggest reasons why I managed to change some of my life circumstances. How much is reasonable to spend on financial advice and what services are worth it please? I am DIY at the moment but my finances are of the size where only the easy bits were necessary

OP have a look at the HENRYUK subreddit on Reddit.

It stands for High Earner Not Rich Yet, and you will probably find many people in similar scenarios who will give you proper advice / commentary rather than just abuse.

Someone suggested having a similar forum on mumsnet, but the suggestion also AFAIk just met with a stream of abuse, even though posters don’t seem to like people with these higher incomes asking any financial questions.

HENRY forum for mumsnet might be a good idea to keep these things in one place, and keep a more targeted audience…

Well, Philip Green put most of his wealth in his wife’s name and moved her to Monaco. Maybe you could try that with your husband?

At £150k with two kids you aren’t ’out of the trap’, you break even vs earning £99k (with two kids, on new hours from September).

So the income over which you might want to consider taking avoidant action is much larger - comfort lay up to £200k with two kids IMO. Not for just the 15 at 3 though I’d argue.

@Difficultquestionplzwhat benefits are you referring to that your husband is ‘losing out on’?

If your child is 3 you’ll get the 15hrs universal funding regardless of salary.

But no. There’s no point hiding half your salary to “gain” the other 15hrs. Just pay it.

is any high earner actually doing that? the one pot and then everyone takes out what they want/need? I don’t think it’s practical, you would need to discuss every spend or investment decision…

That's what we do in our house. All money into the pot, equal spends, equal discussing about savings and investments.

Why would it not be practical? Just because one person is earning less doesn't mean it's pointless discussing things with them.