Working and childcare costs - How do you do it?

[JuliDav]

Hey everyone!

I'm currently pregnant with my first baby and I'm already petrified and confused about what will happen after my maternity leave when I'd be due to go back to work and I was hoping someone could shed some light on how this works.

Just to give you some specific background knowledge, I live in London with DH and we are both working full-time. My salary is £1500 and DH earns £1300 a month. With rent and all the other bills paid, we currently have about £1000 left in a month for living including food etc. Due to some rough times recently, we do not have any savings. So far I've done some calculations with entitledto.com and see that during my maternity leave, we would be getting about £1000 a month in various benefits(including statutory maternity pay, child tax credits, housing benefit and child benefit). In addition, I intend to work part-time from home during my maternity leave and this would bring an additional £200/month.

What I'm worried about is what happens after my maternity leave when I intend to go back to work full-time. I haven't been able to really find out how much support we could get for childcare and how much it actually costs. I've heard that in London you can easily spend c. £800-£1000 on childcare per month! Is this really the case and how on earth can people afford it?! In our case, all our money would go on childcare and this would leave us about £200/month for food etc.

I'm not sure if people would be happy posting details about their financial situation on here, but any information would be much appreciated. Thanks in advance!

Childcare costs vary greatly depending on whether you choose nannies, childminders or nurseries. Would suggest you ask around now so that you get an accurate picture of costs. There is help with childcare costs for people on low incomes and, once you've got a better idea of the prices you should be able to find a Tax Credit calculator and run a few 'what ifs'. I used a childminder myself but it's a few years ago and prices have probably changed.

If you are left short by returning to work full-time then you could look at the lower wage-earner becoming a stay-at-home or going part-time. You may be better off. Good luck

i don't think you are allowed to work part time during your maternity leave or you could lose your SMP entitlement. As far as i know you are only allowed to work the 10 KIT days.

I'm in the south east and nursery for a baby - 18 month old costs about £44 a day. In fact it's not much cheaper when they're older, still about £40 a day for a toddler.

Hi everyone and thanks so much for your replies!

I don't think working part-time or stay at home would be an option for me to be honest.. The way I understood it, the maximum help you could get in tax credits to pay for childcare was £140/week and that is if you qualify for the maximum, which I doubt.. Hm, so it is true then, that a full-time nursery place for 5/week would cost £880/month .. Yeah I'd better weigh the different options very carefully!

Oh, Morph2 as I've been working for the other employer before the 15th week before my due date, I will be able to carry on working for them during my maternity leave from my main employer and still receive SMP..

I think you only qualify for the maximum on childcare tax credits if you are a single parent. Not sure how much a couple might get though.

Yeah that's what I thought as well. So all in all, you'd still need to cover probably 2/3 of the cost. It's starting to dawn on me why people are complaining about working just to pay for childcare..

If I were you I would contact a few nurseries / childminders etc in your area find out the costs involved and then do a quick calculation on the tax credits calculator. Bearing in mind that the calculator will only give you a figure until 04/04/11. That way you will have a good idea of affordability.

Please try not to fall into the common trap of thinking 'I'm working to pay for the childcare' because it's a joint cost across your household, not one solely paid for by the woman's wages.

I work 24 hours per week, my dh works ft. We have two pre school children.

We currently pay £900 childcare costs per month and recive £400 in wtc. Not ideal but worth it in the short term for me to continue working. Our joint income is similar to yours.

Agree with what others have said about checking tax credits calculator and getting quotes from childminders/ nurseries as these do vary, even in the same area.

Hey everyone and many thanks again for your replies!

I will start contacting the nurseries in my area for a quote and also try to get an idea for costs for childminders. Based on what I've heard nurseries can be up to £60/day in my area in SW:/.. Yeah I've done several calculations on the turn2us-website, but as someone said, it only gives you an estimate up until 04/04/11. I think it will be most useful to use it after the turn of the tax year.. Oh and thanks for giving me an idea on your expenditure "ladyofthehouseoflove". Although you have two children, this gives me an idea how much support we might be getting..

I think it would definitely be worth investigating if both of your employers do the childcare voucher scheme - this enables you to purchase vouchers which are redeemable against childcare costs tax free. This is different from woking childcare tax credits which you should also investigate and are likely to qualify for.

I would also emphasise the childcare vouchers, which will help relieve tax (at least at basic rate). Both parents can get them. If your workplace doesn't have them (or even asks what they are!) then it's worth telling them that providing them will save a lot of employers' NI contributions!

I don't think that you will qualify for WTC on your incomes. We were on £1000 and £1200 net with a nursery bill of £750 per month. We only got the basic £545 Child tax credit. Even when DH was made redundant and it was only my income (around £1400 per month net) last year we got nothing extra, although we did not have to pay childcare as he was not working.

The vouchers do work well though as we have used these for childminder, nursery, afterschool and holiday club

It really is a bit of a nightmare. I have been working out pay less childcare and what my take home would be on different hours of work and its quite depressing.

I currently work 15 hours a week and was considering going back fulltime when ds starts school in Sept (different scenario to yours) and if I did work fulltime the costs of afterschool clubs for my dc (I have 2) would mean I earn less than sticking to my 15 hours a week so funnily enough I have ruled out going back full time! and Yes I do realise that childcare is a joint cost but it isn't about that, it's about either parent working part-time v's fulltime when taking into consideration childcare costs. DH can't do his job fulltime so it is down to me to either be part-time to avoid some/all childcare costs or be fulltime.

Childcare and it's related costs have been horrible for me for the last 4 years since ds was born (bless him) and I have had to think about childcare costs x 2.

I do think without childcare vouchers that dh has deducted from his salary that I would've been better off financially not going back to work at all. Although I am in a professional job which is better keeping my hand in rather than taking a few years off and going back to later, so I have managed through sheer grit and creative-childcare to stay in my job since having dc, but it isn't easy.

And yes this is why so many people have to weigh up working v's the cost because no matter what people say paying for childcare is a massive expense.