I'm hoping there's already a thread on the SAHM writing about CB cuts in Saturday's Grauniad (money section), but in case there isn't...

[kveta]

please someone come and talk about it here! this one

DH and I were both spluttering all the way through this, and found our hearts didn't bleed too much.

Did anyone else read it and weep?

what is the 12 1/2 hours free childcare everyone is talking about above? If your spouse pays higher rate tax and you return to work you do not qualify for any free childcare.

This is why SAHMs with higher earning spouses cannot always afford to return to work as you have to pay the cost of childcare in full plus travel, clothing etc. If you travel by rail you pay far more per day to commute if you are part time as can't use a season ticket and have to pay on a day by day basis.

I don't see the point of leaving your child in childcare 12 hours a day to come home with no money after all the costs of working have been taken off.

I am very confused why the NHS "unexpectedly" cut her DH salary by £650 a month. He must have stopped doing on-call or weekends because basic NHS pay-scales are pretty rigid on how long you have been working.

"as a doctor the commute would be too much because you are usually required I think to live within a certain distance of hospital,seems very odd to me."

Only when you are consultant you are expected to be (I think) about 20 minutes away to do on-calls, as a trainee you can live anywhere as long as you get to work on time.

Miffy- don;t all children theoretically get a certain number of hours from age three? ds4 starts to receive that next eyar, which locally is provided mainly in the form of free preschool at the Primaries.

Certainly most people here are HR tax payers and they get that.

Appletrees, I'm not particularly promoting the idea of not saving because house price inflation will give you 6% p.a. or whatever (depending on what your deposit was). However, it has worked out for lots of property-owners like this.

And when DH made his calculation last night, I was a bit depressed, because we have been savers for years, always thinking housing was overpriced and had to crash. Yet despite having been savers, we have, annoyingly, missed out on rates like the 6% p.a. he calculated (see the post above).

However, how were we to know, and after all, higher rates of return are for higher risks. It's just very annoying to get negative rates of return on investment (currently, saving loses you money, thanks to inflation + low/no interest rates on savings and low interest rates on credit) if you don't want risk. Talk about moral hazard!

As long as you can get no/low interest on a current account or even savings account (most high street banks offer rubbish rates), and low interest on credit, there will be an major incentive for people to spend, not save.

It sounds as though you will continue to have savings, and so will DH and I. However, many people will continue to play the low-interest credit-versus-no-savings interest game. And given the paradox I mentioned in the earlier post (if you owe the bank £100 billion, it's the bank's problem), banks and governments will be too scared that lots of people will go bankrupt, and won't dare put up interest rates. Sorry, savers! You're going to continue saving no matter what. We're worried about whether borrowers will continue repaying.

Sanctimoany.

You are right that the free nursery hours for over 3s are for everyone at the moment although I thought of that as education rather than childcare. However I think they have stopped people using them at private nurseries and where I live only one nursery is state run so only a small percentage of people would be able to send their children to this state nursery.

The childcare I was referring to was for babies/toddlers - I thought some people received financial help towards childcare in a day care nursery or with a child minder for under 3s. Mothers with higher rate tax payer DHs would not qualify for this even if they were on very low salaries themselves.

yes, that type is means tested. Both parents must be working voer 16 hours to get it as well.

here, almost every child attends preschool but where we used to live there wasn;t state provision. It varies so much doesn;t it?

pluperfect - so the government are rewarding people who have taken on huge debt by keeping interest rates low rather than rewarding people who have been cautious and saved or not got themselves into too much debt.

Whilst I certainly wouldn't want people to lose their homes it would be nice if people who saved were paid enough interest to stop their savings losing value.

The government are encouraging people to spend and spend and not save for a rainy day it would appear.

Exactly, miffyjane. I know it sounds crazy, but governments and society have been quite clear that they believe it was necessary to save the banks and "prevent financial collapse". It's clear that banks and governments are too dependent on those who are in debt. If banks force forclosures, that means more properties being sold, pushing prices down. That means more and more mortgages held by the banks will be worth less and less. There is no way the banks want to "impair" their assets in this way. As long as the banks can pretend that property prices are high, they can pretend that the mortgages they "own" are worth something.

We are all vulnerable to this dependence on debt, whether we have money or not, although I would say we are less vulnerable if we actually have some savings/are not in debt. If we have savings, yes, we are losing money through inflation/depreciation/lack of interest on our savings; however, we aren't quite as vulnerable as those with some debt, as there is always the risk the bank will want to make an example of one person, by forclosing on his/her debt!

From my hazy memory of economics A level I seem to remember the banks needed a certain amount of money deposited in order to lend. If we we were all to take out our savings and spend them the banks would collapse surely? So why don't they encourage people to save by raising interest rates above inflation and then the banks will be able to lend more to first time buyers/businesses?

pluperfect your posts are interesting

Banks make their money from lending to individuals and businesses as credit. They don't make any money from savers; they pay us! And they take us for granted.

There was a period after the credit crisis, when they offered better interest rates to savers/ depositors, in order to "repair their balance sheets". However, they also used the chance to increase their margins (that is, make credit more expensive, so got paid more for lending), and in any case they seem to have got over their high-interest-rates-for-savers phase!

Sorry if my tone sounds very hectoring; I'm not trying to be rude, but to write clearly.

it's not hectoring it's really engaging! I am a rather bitter but resigned saver so I'm reading with a bit of the old heartsink though

Nice to meet fellow disgruntled savers! Let's have a moan together and discover how many of us there are.

Where are you, Siasl? It was you comment on "...the priorities of the English middle class. Don't worry about paying for the house but darling daughter must have her ballet lessons" which kicked off my economic howl!

Ooops, your comment, not you comment.

So much for trying to write clearly!

It's a nightmare: you can get better rates if you put it all in one place but we are too scared off the bank collapse potential to put it all in one place. And we are terrified of the stock market.

Well, I'm reading my way through one of these books on the new inflation, and hope there will be some kind of conclusion about how to avoid it. However, I fear it will be something along the lines of: "manage your money more actively" (hmmm - to that!), along with the more sensible "don't invest in what you don't understand." Again, not very helpful. It seems we live in a high-risk world now, and that's just that; we have to lump it.

On a lighter note, I wonder if Whatsername from the article is kicking herself yet, for exposing herelf to this sort of mockery in a public forum. I noticed that the article's Guardian online page did not allow comments!

pluperfect - I think stock market is risky, savings are falling in real value, housing market starting to fall. I'm hoping housing market falls more than our savings then we might afford to move up the property ladder.

Yes, it would be sensible if housing prices could decline overall and if people could simply sell for less and buy for less. However, with so many "homeowners" so close to the top of their "house value", the reality could be that people just refuse to sell for less, and we will only see forced sales.

DD gets 15 hrs free at nursery - any 3yo can. it's GREAT but not that useful if you need FT childcare.

Two nights per week behind the bar or in Tesco would cover the loss of CB on minimum wages with no childcare implications. That lady should start doing Avon, Betterware anything or here's a thought do your own cleaning. My DH and I both work and would love a cleaner but music lessons comes above cleaner for us so we do it all. The good thing is DH does mornings, I do evenings so the kids get to see us both.

Yes miffyjane, when we were talking about the 12.5 hours yesterday we were referring to education for 3 and 4 year olds. I was searching in vain for that simple word yesterday (!) to explain why it isn't free childcare that helps parents work. Unless they can get a job from 9.30 to 11.30 each morning that is.

Couples on lowish incomes who both work more than 16 hours can get up to 80% of childcare paid for (on a sliding scale). This means that in theory they could organise work so that one of them is always at home and also get some great child free time at the expense of the taxpayer. Whilst me and DH, working 35 and 15 hours respectively, who needed the childcare, would have got no help at all, despit being on a low enough income, because DH was one hour short. Crazy. This is why many parents elect to have one of them stay at home.

it probably would for teh author, perhaps not for many people though- my experience is that even if teh supermarkets were hiring (not round my way) the people with HR taxpaying partners rarely have guarantees about what time they'll be home from work of an evening to plan aorund; heck, we ahven't had that guarantee since DH started to earn above trainee rates 9and before that I did work evenings, in an FE college)

It can help aprents work when it's done as it here- with the school palcement scheme, plenty drop teh younger one with the older ones then go to work and arrnage for a Nanny or Cm to do pick up (or the local playgroup does a pick up and lunch with a PM session)

So significantly cutting childcare costs overall

Which has to help people work, surely?

Yes I guess it depends where you live. Here there's only one CM who's full most days already.

Whereas ehre, our excellent Cm can hardly find anybody.

Silly huh?