Childcare shock

[LittleFonzy]

Hi. Totally brand new to the forum. Please bear with me, as I can be a little slow on the uptake sometimes.

My partner and I are expecting a baby this December and like to be as organised as we can.

We both have very average salaries and have just been researching the cost of childcare and frightened ourselves to death.

By the looks of things, the childcare would take about 70% plus of my partners salary if she goes back to work. This is for a registered nursery.

Looking at our finances we have always run a relatively tight ship, and aren't extravagant with clothes, holdiays or monthly entertainment, but we would be certainly losing money each month with these figures.

So, I guess the question is, what are we missing or what should we be thinking about? Do any members have any words of wisdom? Things to think about? Articles/books we should read?

Thank you for any help.

By the looks of things, the childcare would take about 70% plus of my partners salary if she goes back to work.

This is incorrect. Half of the cost of childcare would come from your salary.

This is incorrect. Half of the cost of childcare would come from your salary.
Yawn, household income is what matters.
Op look into tax free childcare.

And you also need to add up how much you'd lose long term if your partner does not go back to work. By the time your children are in school and childcare costs ease off, lack of career progression will have cost a lot.

Your partner would miss out on career progression and pension payments if she does not go back to work. There are childcare tax schemes which knock off (I believe) up to 2k and at 3 you get a contribution from the govt towards childcare.

Hi OP,

Yes childcare is shockingly expensive, and (depending where you live in the country) often equates to about as much as one person take home for a day after tax and other deductions. Naturally if you have two salaries coming in it should be considered a household cost rather than that single persons cost to bear, however.

This is why many parents choose not to return to work in the early years. Personally I did decide to go back to work, as although it was painful for a few years, I have got those years on my CV, have had payrises etc in that time, so am much better off now than some of my friends who are now trying to return to work after a long break.
This is of course a highly personal decision with pros and cons either way.

Have a look at the entitled to website and plug in what your figures will be when baby goes to childcare, and you may be eligible for some funding.

What percentage of your household income does it take up? And what does it matter anyway if you can both afford it?

Childcare is expensive. Perhaps she could do four days a week, and you could do four days a week. Perhaps you could do compacted hours?? How does it financially stack up for you both to lose 20% of your incomes versus the cost of childcare?

Do the sums.

Yawn, household income is what matters.

Exactly. So why was he deducting the cost solely from his partner’s salary?

Because he's a halfwit and/or sexist?

You might be entitled to help with childcare costs via Universal Credit (if joint income is under the threshold) and if not you can apply for Tax Free Childcare.

As PPs have said, when considering the financial benefits of being a SAHP v returning to work, it is important to consider loss of pension contributions and future earning potential.

Who is the higher earner or is it roughly equal?

You have to think of it as a ‘joint’ cost. What % is it of your salary? Also 70%?
And yes it’s expensive but you have to sort of suck it up till the 30 hours of childcare kicks in at 3+ when you get some relief and then when they start school. If either of you can work 4 long days (which is what DH and I did for a while) then your baby needs to be in childcare for only 3 days. Currently I work 4 days and DH finishes early on 2 days (and makes up for it in the evening). This way our kids (well kid, the older one is in school) is not in childcare for 50 hours a week.

Presumably because she is the one considering whether or not to go back to work

OP I think what it comes down to is where your other half wants to be in 5 years time. Might be worth sucking up the costs for the sake of career progression or not worth it because she could pick up a similar enough job later on.

Have a look at the government tax free childcare incentives. This replaces the old childcare voucher scheme.. www.gov.uk/tax-free-childcare

Essentially for every £8 you pay the govt will give you £2, up to £500 every three months - 2k a year.
So it does help a little bit.

I think the Op is just highlighting 70% is a lot...... rather than it will just be his other half paying for it.

Presumably because she is the one considering whether or not to go back to work hmm

Which, if she does, still means it comes out of both salaries. It’s a joint expense.

@JoxerGoesToStuttgart because as a couple they are clearly trying to work out if it’s worth them both working. I’m having the same on-going conversation with my husband at the moment, his salary is irrelevant in the conversation because he will be working full time whether I go back or not, so the conversation is how much of my salary will be used to pay for childcare vs not paying anything for childcare because I’ll be at home with them. (We have 3 kids so it’s more like childcare is taking 98% of my income 😫)

I think the Op is just highlighting 70% is a lot.

But it’s not 70% because it’s coming out of both their becomes combined so it’s a lot less than 70% of their income.

Yes it's a household cost. However if it's a choice of one parent in employment Vs 2 parents in employment + childcare costs , its pretty obvious a consideration is whether the second salary covers the childcare bill. Not the only consideration but a major one.

OP- look at tax free childcare, look at whether you get child benefit (if one of you will stay at home you should claim it regardless even if you don't take the cash. This helps prevent gaps in your national insurance history). Look at alternative childcare options eg childminder Vs nursery Vs nanny share.
I also agree with pp about thinking about the longer term view , especially with the 15 hrs of 'free' childcare from the term after your child is 3.

But seeing it as a joint expense doesn't magically add money to the equation. It's a pointless "feminist" dig that doesn't help anyone.

Also in the real world not everyone has a job that offers career progression.

For example our childcare costs are 2/3rds of my husbands income as he earns less than me..... we had to weigh up whether it’s worth him working or being a SAHD

OP you asked for tips, there are loads here
www.moneyadviceservice.org.uk/en/categories/having-a-baby
and here
www.moneysavingexpert.com/family/baby-checklist/

Don’t forget to include child benefit if you are entitled to it.

Our youngest is leaving ft nursery this month. I stupidly totted up all the money we've spent on nursery since the DC started and it came to £120k. I could have bought a ferrari or a holiday home for that 😂. I have friends in France that are horrified by our childcare costs as theirs are heavily subsidised. OP get all your tax credits for now and at 3 you cab get the (sort of) 30 hours a week. I say sort of because its only for part of the year and only for some of the care so not actually 30 hours. It's been a very tight few years I can tell you but I'm hopeful we'll have a better life now.

Work compressed hours or one of you does part time around the other so you don't need to pay for child care. This is what my husband and I did when we had our second child.

Shop around for child care providers. Nurseries where we live can be up to £15 per day more expensive than childminders.

Do you have any family nearby who would be able to help out at all?

There are also tax incentive schemes and look at if you are eligible for any tax credits, which I'm guessing you may be if child care is really 70% of one salary.

But seeing it as a joint expense doesn't magically add money to the equation. It's a pointless "feminist" dig that doesn't help anyone.

Umm no, it doesn’t add money to the pot, but it makes it pretty clear that it isn’t 70% of the money there is to work with. It might be one person deciding whether to go back to work but the total money pot is taken into account (or should be) when paying For childcare. If she goes back to work, she isn’t just paying childcare and being left with 30% of her salary, is she? Or if she is, fucking leave him pet and don’t have anymore of his children.

Well if BOTH parents earn the same, and it’s 70% of one parent’s income it IS sexist to assume that it should come out of the mother’s salary or that she should stay at home. Especially given that her career would have had a break thanks to maternity leave anyway. So it is important to know how the household ‘joint’ income works and not assume that the solution is for one parent (almost always the mother) to stay at home.

The time to look into the cost of childcare and what having a child would mean for your finances would have been before conception. Not after!