AIBU- high earners now better off cutting hours following hunt childcare reforms

[ant1234]

In light of Hunts childcare reform announcements I've just run the numbers .... and as a high earner have concluded I would be £400 a month better off cutting my full time work to 3 days a week!!!

Don't get me wrong - the reforms are great for very many people and this is definitely a first world problem, but because of the 100k a year eligibility cap they are v biased against families with one high earner earning enough for a 3 bed place in the south east (ie core Tory young professionals). What am I missing?!

Numbers: current salary 150kpa. Contribute 30k pa to a pension and will pay 3800pm for childcare next yr when 2nd child arrives and in nursery (will have 2.5yr old and 9month old in sept 24). Net= 2590 per month

If go to 3 days a week and earn 99,999 I will need only 60hrs care a week (3x10)which will cost me c810 a month with the gov free 15hrs for each child factored in. Net = 2902 a month

Or is my maths all wrong?!

I’ve not looked at your numbers, but you will be able to pay £60k per annum into your pension to reduce your income

3.48 From April 2024, working parents of 2 year-olds will be able to access 15 hours of free childcare per week, benefiting parents of up to 285,000 children.
This will be extended to working parents of 9 month to 2 year-olds from September 2024, benefiting parents of up to 640,000 children.
From September 2025, all eligible working parents of children aged 9 months up to 3 years will be able to access 30 free hours per week.

So yeah, yours looks right to me. You may well be better off going to 3 days, or 4 days with a pension contribution. But there may be top up costs on those 15 hours, remember they are 'term time only' etc.

Sorry no help but similar position. Will the free 15 hours still remain for 3 year olds regardless of parents income?

You are right - I will consider!
Obv numbers also predicated on a 2nd child arriving that not yet conceived - so I realise I shouldn't have written that as tempting fate and presumptuous!

Does that impact your career progression though? I mean, you aren't going to be worse off are you? Just could be equally well off by working less, though your progression might be impacted.

Or have I misunderstood?

Jesus wept

Cry me a river op

Yes probably will have an impact on progression to go part time... but with all the juggling and instability of full time work plus 2 children I'm not sure how much if you apply a "quality not quantity" approach.

So in that case it's not necessarily going to mean more people working= more people paying income tax,
!

You are right. And don't get me wrong- totally correct that support targeted at those that need it most. But if you are a numbers geek it is interesting it will have odd effects for some..

On numbers above the cut to hours would mean tax goes down from 49k to 27k per yr

But then given this affects a v small number of people and the policy helps many many more I expect more tac overall is still brought in.

Remember the lifetime pension allowance has also been removed so it’s worth seriously considering upping pension contributions

YABU. If you're a high earner you don't need the help anyway, so I don't understand why are you bothered and working out all these figures?

Millions of people have had no choice but to stay at home because they can't afford any childcare and now it looks like they finally will have a choice. Don't you think that's a good thing?

The childcare reforms do nothing for us either OP. We are in the south East. OH earns over 100k but I’m a nurse earning £12.8ph it really doesn’t leave much after paying childcare. So I quit my job and work a few bank hours on weekends sometimes.

I would love to go back to a permanent job but it’s not worth it for us; the cost of childcare for 3 and all the stress covering my shifts was too stressful when the kids went to school in addition to the stress at work. No option for my husband to reduce his hours as we couldn’t afford our mortgage.

I thought they wanted nurses back at work?

Echoing PPs -

Put £50k gross into your pension, costing you £40k net plus another £10k back on your tax return.

Use 30hrs for both kids plus tax free childcare, keep your personal allowance etc. intact.

I would think this is by far the best option financially.

Humblebrag much? Do we really all have to sit here and 'empathise' with you over this? Can't you ask your cleaner?

People love to answer a question OP hasn’t asked.

Shes clear that she thinks this is a good thing for people who earn less than her but is trying to understand the best course of action for her own personal circumstances and of course sone people are jumping all over to tell her to pipe down because she dares to earn over £100k

It's just most of us are far from fortunate enough to ever earn anywhere near £50,000, let alone 100,000, so perhaps we struggle to empathise, Trisolaris.

Anything that might be of benefit to the most vulnerable and poorest people in our society has to be a good thing. They are the people I care about.

With respect, OP wasn't asking for empathy.

Yeah it’s crap. Our nursery bill is £3200 a month.

I feel aggrieved at the cost of childcare overall really

Thanks @GiltEdges

I'm not asking for sympathy. I'm lucky.
But I do care about our economy- and it is clear that the policy will not help many of those living in areas with high housing costs (who accordingly must earn more to live there/commute), those with unequal salaries to their partners, or some single parents. It will not incentivise many to work more (inc the most qualified doctors/consultants etc). Moral of the story=have a spouse - and have one with a similar high, but not too high, income to you and do a job that doesn't require you to live in the south east/propert hotspots

I just don't understand how or why people who are comfortable enough to have always had a choice can feel entitled to moan or hard done by.

You know you're on mumsnet when you get threads like this.

Stop voting tory op if you don't like it.

YABU to be annoyed about this as such a high earner. I just couldn’t get worked up about this if I earned 150k a year.

Imagine you still live in the SE but earn less than 1/6 of your salary, or minimum wage - but still need to use childcare to work, still need to work as need to pay the bills and mortgage. What do you think your “net” would be then?

There has to be a cut off somewhere.

Lol this.

It's an interesting thought but the free childcare doesn't kick in for a couple of years so would only benefit your yet unborn children.
If you end up in that situation when (and if) it does, then why not? You can always go back to full time when your kids go to school.