Loss of 30 free hours will cost me £37,000 of pre-tax income

[ChildcareCost]

9 month olds are eligible for 30 free hours from September. If you earn over the threshold, you do not get this 30 free hours plus the £2,000 of tax-free childcare.

My nursery typically charges £2,150 a month for an under-3. This works out at c. £10 an hour assuming a 50 hour week (open 8-6).

They have circulated the free hours schedule this week, and the monthly cost with 30 free hours is £1,100 hours for an under-3 (noting funded hours only cover 38 weeks).

This means the loss of the 30 free hours will cost me £12,600 a year. Plus of course the loss of tax-free childcare at £2,000.

So, I need to earn an extra £14,600 net just to cover the cost of not being eligible for this scheme.

To earn that £14,600 over £100,000 – I need to earn a gross figure of £137,000.

Surely this is not fair on the parents excluded from the scheme? It doesn't seem proportional that I need to earn an extra £37,000 just to recoup the loss as a result of not being eligible!

It’s not right OP, it’s a terrible system. Anyone that says otherwise isn’t understanding it or is bitter. No one can honestly say that faced with this themselves, they wouldn’t have an issue with it.

Why does there "need" to be a cutoff? How much do you honestly think is being saved by having such a high cut off? Hardly anyone is excluded and those that are (and their spouses), are discouraged from working more and seeking promotions. I would hazard a guess that it probably costs more in lost earning than it saves.
Plenty of things are universal. Healthcare, education, access to roads for example. There's no real reason for childcare to be any different.

No, because I think what people overlook in that generally speaking you make high wages for a reason - greater effort.

Not always as obviously some professions are underpaid etc., but generally you don’t make that kind of money unless you are working pretty hard.

The system should always help those most in need such as the disabled, but it shouldn’t be a race to the bottom where you are always penalised for being a high earner.

It's the top earners who basically fund most services, and they increasingly get a bad deal from the tax system. I think it should change, but the politics of doing that are just too difficult at the moment. As a result we have these bad outcomes of highly skilled people working less when it would be better all round if they worked more.

That's fine, and if you want to be a proponent of universal free childcare, that's fine. I sort of agree. But countries that have universal free childcare/healthcare/education also have taxes that are much higher than ours. Just find that people often want to have their cake and eat it.

Plus the op is not having anything taken away. She simply doesn't qualify, so she needs to reassess the narrative she's been using. This is a new thing.

Edit- op seems to now be actively looking for a promotion to earn more so perhaps in this instance the stick actually works better than carrot (ok, v tongue in cheek)

Don't worry OP, you'll fiddle something somehow.

Yes, and between £28,000-40,000 I earn nothing due to childcare costs (with the 30h).

It’s not people like the OP that has put the country on its knees.

Yes but they have higher taxes for everyone. Not just higher earners like here. It isn't people like OP who ought to be paying more.
But I suppose it's a chicken or egg problem. Wage stagnation means we can't have higher taxation which in turn means we can't fund the things we need. I'm not sure how we get out of that trap.
Whether it's being taken from OP or they simply don't quality is moot. Just semantics. They're justified to query and bemoan their exclusion from what they fund.

There are a lot of uneducated/ignorant/ill thought out comments here.

You’re miles over the threshold though. You’re more than earning the extra £37,000 that you have calculated you need to make it worth not getting the free childcare.

Sure if you earned very close to £100,000 I could see why you would be making the calculation, but as others have said you can salary sacrifice.

But really at £160,000 (even at £100,000) you can pay for your own childcare.

My kids were in nursery before these hours were about, and although I agree that are a good thing, we coped!

Idk do we know if she works in banking?

Did she vote for Brexit?

If so then she is a contributing factor!

I, like you OP, think help with childcare should be universal. It's a fallacy that everyone on 100k has £2k a month to easily spare. I would rather that people who want to work (on whatever salary) are able to do that with the provision of good quality childcare. That's beneficial to the people, the children and society. I would not be opposed to it being tiered a bit, but all childcare (I think) should to some degree be subsidised. Economically it makes sense too - as more high earners will work and therefore bring in more taxes.

If we were to unexpectedly have twins tomorrow, it would not be worth my husband working for the next almost 4 years, which is pretty mental. Also in most cases that is more likely to be the woman, so the policy of means tested childcare impacts women more than men as well/

Can't the child's df pay 50% of the nursery costs or contribute something so that you don't take such a large financial hit?

Also, have you a back up plan for the inevitable days when your dc is too ill to attend nursery or if the nursery needs to temporarily close? These are also things that you must consider, possibly even more so than focussing on feeling 'hard done by' because of having to fund your own childcare.

Sorry I don’t have a great deal of sympathy, but becuase of your current attitude to taxation…

…I had kids in nursery during 1995-2003 and back then there was no free childcare for anyone, other than a voucher scheme for tax deduction (and I don’t get that) . Even back then cost of child care exceeded are monthly mortgage payments by 2.5 times.

I have been higher rate tax payer for years, but only just over half of your salary. And my exh couldn’t work due to illness. Having my sole wage being entire household income (vs us both being able to earn half the same total household income each) “cost” us dearly in tax and ni- you can’t move PA so we were in effect ~£6000 worse off due to tax and ni than a couple on same amount with even split.

however difficult that was, I didn’t gripe to other. I was a higher rate tax payer and put me in a shed load better position than others. We had debt, large debt when kids were little becuase of this.

however, kids are in nursery for a short time in your life. It is the very most expensive time of your life (or used to be before government started providing sole support which I am enthusiastically in favour of) and you just need to get through it and out the other end. In due course, kids will leave home and then it’s time to pump all that spare cash into pensions and mortgage. And to take those long awaited fancy foreign holidays, or buy a nice new car.

Imhe, You need to start thinking about taxation in a different way. Be proud of what you are contributing to the state, and support you provide to families less well off, instead of burning up with resentment. you are in a tiny minority of population of woman who have managed to match the male privileged wages and you should be extraordinary proud of that. I’m bloody proud that I have probably paid more tax than likes of Rees Moggs of this world who have huge wealth and fiddle their way to avoid tax. I am cool with paying taxes, even IHT if I don’t end up in care home. I am at least doing what I can to help the younger generations in need of support by governemnt, and proving up our ailing nhs.

sure, you may need to cut your budget spending, less holidays, eating out and even reduce your pension payments , but that’s the parenthood penalty and always has been and affects EVERYONE no matter how little they have. Revise your views, enjoy your children’s childhood, it doesn’t take a lot of the extras you probably have had up till now.

in due course, it will settle out. You’ll manage just fine, and more than manage.

remener whilst some folks are getting “free” childcare, you never ever know what future has in store. You may need more support from taxation revenue to help with long term illness, unemployment, educational needs, or care home costs etc over your lifetime. It is, thank goodness, the whole point of a social care system.

That's a valid point and I can see why you would. I agree, in an ideal world, that would be nice. But I suppose it's not an ideal world, is it? The age when children start school isn't going to be lowered. So realistically where do you save money? I don't personally think means-tested free hours are a bad thing - especially in this case when the person can clearly afford to pay off her own back. A case of different priorities and different perspectives!

This whole thread is interesting discussion about the pros and cons of universal benefits vs means-tested.

One thing to note is that when you have universal benefits, such as the NHS or state education, it's often high earners in the OP's bracket who decide that the provision is not good enough. They then go private and create a two-tier system, thus negating the ideology that set up the universal system in the first place.

Your logic is completely skewed. Everyone pays tax. Tax in general isn’t hypothecated, it’s just paid into the consolidated fund and then allocated according to the priorities of which government is in power. If you don’t agree with those priorities you can vote them out.

Taxation in general in the UK (with a few exceptions) is not predicated on getting out what you put in as an individual- it’s about having a fair and cohesive society.

I pay a large amount of tax. Lots of it goes on things I can’t use or have no intention of ever using, whether it’s child benefit, DLA, universal credit, pensions (not eligible) or drug rehabilitation services (thankfully don’t need it).

I have however used things like the NHS, schools, roads, bins, libraries, swimming pools, parks, free local events etc. Most years I pay in more than I get out I suspect, but possibly not when I had my kids. But I accept that this is the way this country works, I have a decent standard of living and I would prefer not to see people starving on the streets, or living in poverty, or have a completely lawless society.

That is not what I meant at all. What I meant is the country is on its knees for a wide variety of reasons and as such we can’t afford to give handouts, benefits and freebies to people like OP who are on over £100k per year.

On the other hand, can we afford to do anything that might prevent the highest earners from maximizing their potential...

I doubt OP will pay for private education she's moaning about paying childcare.

Which, arguably, is the best of both worlds ;)

OP earns over £160k per year. The cost of childcare isn’t going to stop them from maximising their potential…

I earn over the threshhold. If we had twins there'd be no point in my husband working which would definitely prevent him from maximising his. Unfortunately most households are the other way around so women tend to be much more impacted by this than men (and thereby adding to the gender pay gap).