Advice needed for impact of salary increase on childcare costs

[M4rv1n]

Hi All,

I'm looking for a bit of advice on what my partner's salary increase may do to our childcare costs and whether we'd be better off earning a bit less.

So, my current salary is £52k a year and my partner was recently given a pay rise to £52k (from £47k), so a combined income of £104k a year before tax.

We have two children, one born in May 2022, one in March 2020, neither is disabled.

The older child started receiving funded hours a few months ago

Both go to nursery full-time, 9.00am to 5.30pm, Monday to Friday.

Our nursery charges £7ph.

My concern is that by having a family income of over £100k a year we will only be eligible for 15 funded hours a week for the older child, instead of the 30 we are getting now. I have calculated the difference at around £5k a year, as well as losing the entitlement to the tax-free childcare, possibly another £2k per child per year, so altogether about £9k, which by my calculations means that after my partner's decent pay rise, we may actually be £4k a year worse off than before, which is a lot of money.

Can anyone help me make some sense of this and whether it would actually be better for me or my partner (or both of us) to somehow convince our employers to give us a pay cut?

It's not a combined household income if its one parent goes over 100k so you are fine.
At least for now but God knows what will happen to childcare after the next general election

Have you put your figures into Childcare Choices website?

When I was at that level I increased my pension to bring the net down.

You are absolutely fine - its a very unfair system that punishes single parents. You can each earn up to 99k and be fine, as long as a single income doesn't exceed 100k

You might both want to put the extra money into pensions to get below 50k to get max child benefit

2 things: it's 100k as an individual earner, and it's taxable income. You are both so far away, keep your salary.

What you might loose out on is child benifit. That starts tapering at 50k taxable, individual income over a tax year. You'll need to look at both your pension contributions, and other taxable benifits like company cars, and check you're taxable income is under 50k. Probably worth increasing pension contributions to bring it under if so.

As others said it's £100k per single person

But you will lose cb

Unless you put extra info your pension