Needing to reduce income to get free childcare

[Katie1186]

Hi all,

I earn over the £100k threshold and actually would be better off if I contributed £10k into my pension to qualify for the 30 hours of child care.

Has anyone done this where you have manually contributed after being paid or do I need my employer to do this in order to reduce my income??

I know people who have had their employers do it but I don't know anyone who has had to manually do this themselves.

Thank you so much in advance!!

The poster clearly doesn't understand the difference between gross and net income....that's the issue here

A loophole is an unintended consequence of legislation

i am sure when the legislation was written they didn’t consider that people would be cutting their work hours or increasing their salary sacrifice to avoid the cliff edge

given the rumours on taxing pension contributions (which would be very hard to implement practically) they could undo this possible ‘loophole’

far better to just rewrite the legislation so it either tapers off or you just give the same childcare support to all families with 2 working parents. As pp said - it works well in other countries so why not here

eta you could also make childcare costs tax deductible

Well it is more moral because it's fucking legal whereas cash in hand to continue claiming UC isn't.

And we go back to the issue of who is actually paying for shit: people like OP who contribute to the tax take

I would advise against this, as this puts you on a 'mummy' track meaning you can kiss goodbye to promotions (typically) and you will still have to do nearly the same amount of work (again typically but there may be exceptions). Don't do it, just put the money into your pension to reduce your income now and then it will be easier once your kid is in school. You will also be in a much better place in your career

My main observation from this thread. There is so much hatred and jealousy of women particularly against other more successful women. Why? If the situation were to be reversed, men wouldn't think twice about using salary sacrifice to contribute more into their pension and reduce their income and other men would advise them to do so without all the hatred and vitriol. Why don't we not support each other more?

Without people raising children, there would be no more humans to work and pay tax for the future. No benefits, no support for an aging population, society would crumble then die out. So children are not a choice, they are a necessity. Who will pay for the medical treatments and benefits for future disabled people, and your pension.. my children will. Having children is how everyone survives. We should look after working parents as a priority.
OP might well be doing a job that involves designing new medical products.

Yes it’s interesting. I’m often on the UK Personal Finance Reddit, which I imagine skews more towards men as a demograph, and this advice is commonplace there and rarely generates much discussion. Personally if the choice is having more money overall or having less money, and the method is a totally legal, allowable and common way, I’ll take more money, thanks. And for all the handwringing, I bet 95% of the people on here would do the same if they had the chance.

Sorry meant to quote this on my last post!

Yep, in fact this exact advice was given to me by a man in personal finance online group ( can't remember which now), but yes it's totally commonplace, everyone does it because it's part of totally commonplace and legal corporate salary sacrifice policies and nobody bats an eye lid, because it's a non-issue.... except evidently on Mumsnet, where evidently some people have never heard of such a thing as 'salary sacrifice'?

Yes and then guess who has to pay their full carw hoke fees in old age until their retirement savings and chikdrens inheritence are drained.. the same people who paid additional income into their pensions to enable them to get a small amount towards childcare so they can continue to work and pay into the system.
I can not understand the people on here who are so short sighted and ignorant that they think money grows on trees.

It's ops taxes paying for all these benefits. Have you any idea how much she pays and how much a disabled person would have to earn to take home the equivalent of their benefits?

Exactly this! The entitlement is of the charts. It's now no longer enough that OP is a net contributor and funding benefits for other people, but any attempt to manage her taxation so that she doesn't face an insane cliff face is seen as effectively taking from the disabled. The implication of course is that those on benefits are inherently entitled to OP's money more than she is herself.

Very well put!

What on earth are you jabbering on about? No one is talking about people with LD, racism etc. We are (I am) specifically talking about the people in the post that I replied to. None of those people mentioned fall under any category that you're talking about, or at least the poster hasn't mentioned it therefore I'm not about to make up scenarios about institutional sexism, trauma etc.

I earn about the same, single parent, paying my mortgage, bills, uni costs for the kids etc. I'm happy to pay tax to support the less well off, but I'm not Richard Branson.

Come on.
This planet is burning alive due to an excess of human beings, all of whom are increasingly irrelevant due to technology, who are competing for ever-dwindling natural resources. This isn't 1850 when more kids were needed to work the farm. We are jeopardizing ourselves AND thousands if not hundreds of thousands of species thanks to unfettered reproduction.

Sensible immigration policies will take care of every country's labour and consumer gaps for generations to come. There is no need to venerate, subsidise or incentivise the production of more human beings, and people who produce offspring they can't afford to rear need to disabuse themselves of the notion they are doing the rest of us some big favour.

Let me get this straight. Many pp thinks that OP should fund their benefits and OP should also not try to avoid working for free ( when income > £100k) in her high stress job, because it could jeopardise their benefit sustainability. The sense of entitlement is off the charts! Are you not embarrassed of yourselves for thinking this way? Even so, shouldn't you encourage OP to keep her taxable income below 100k by contributing to pension, to at least make life a little easier for her, so that she continues contributing to your benefit long term? Unbelievable.

I don't agree with anything you've said actually. But there we go.
But based your own logic, maybe you could stop using all shared services, amenities and resouces then to save the planet, or ship in refugees to serve you once the local polulation dies out from not reproducing.

I think the problem is one of financial illiteracy. Many people see a figure like £100k, divide it by 12 and decide that is how much someone takes home. Or someone on £35k thinks somone on £100k pays the same amount of tax they do. So in their head, OP has about £8k a month to spend. I think someone upthread actually wrote that.

It doesn’t matter how many times it’s explained on these kinds of threads - many, many people cannot understand that £100k after higher rate tax, plus mortgage/rent, childcare, bills often doesn’t go very far.

The level of envy, bitterness and hatred towards higher earning women on these threads is a thing to behold. It’s like wandering into an Andrew Tate tribute forum.

Tbf I think people who resent OPs 100k would resent a man’s 100k.

also, talk about OPs take home but the father will also have an income

but agree - 100k doesn’t go as far as it did - especially in London. Any disincentive to work is a barrier to growth and that’s what the government need to get onto

and agree about people being financially illiterate - definitely need better education around personal finances

But I don’t think men criticise, judge and castigate other men who earn well in the same way. I’m sure a man who posted about earning £100k on a male dominated forum would not be met with responses condemning him for being immoral and selfish. He certainly wouldn’t be told “…I bet your wife also works so you’ve got lots of money and you shouldn’t be putting any extra in your pension”

And so what if the OP is married to an high earning DH. Why does that mean she shouldn’t take advantage of a legal, tax efficient method of saving? I had no idea there was some kind of moral threshold when it comes to household incomes. That a woman shouldn’t enjoy the benefits of a higher salary if she is married to someone who earns a lot as well (especially as we always tell women to ensure they are financially independent).

100% this!

yes you are most likely right on the men’s reaction

i do agree with you - ultimately the current system is flawed so you can’t blame people for wanting to ensure they aren’t left worse off. Universal childcare where both parents work would be much better

the current scheme also means 2 parents earning 90k each will get the childcare hours but a single parent earning 101k won’t.

We should be supporting high earning parents to stay in work. They are the net contributors that contribute more than they withdraw from the state.
I would suggest looking to large corporates and individuals earning multi millions that strike individual deals with HMRC, rather than people earning just over £100k as the brunt of criticism. Or the ginormous cost of civil service pensions, currently being covered by the taxpayer to the tune of £12 billion EVERY YEAR.

This in spades 👏👏