Not eligible for child tax credits but can't afford childcare

[4umbrela]

Hi
Myself and my boyfriend are hoping to start a family but have just used the online calculator on the gov.uk site and been told we would only be eligible for £20 per week child tax credits.
We live just outside london and our mortgage is £1200 per month. As our combined income before all deductions is £49,080 we are over the threshhold for child tax credits.
I know to alot of people what we earn is alot, but with the cost of living and travel here, after deductions it doesn't leave that much and as childcare is about £6 per hour here it looks as though one of us would have to give up working.
I'm worried as I don't know how easy it will be to get back into working after the child is born, and as we both earn about the same, it is still going to be a squeeze to pay the bills and mortgage on one wage, I made a stupid assumption that we would get help with childcare whatever we earned. Its been an eye opener!
Anyone have any advice if you are in a similiar position ?

Childcare vouchers etc all set to change in Autumn 2015 I think - all couples earning up to 150k will be entitled to some help. I've only looked at it briefly but looks like for every £1 parents pay into an account government pays 20% up to a total of £2000 per child per year...it's not amazing and I'm holding my breath to see if this policy actually comes in but it may help you plan a bit financially...

Part time doesn't mean 16 hours versus 40+ hours. You could job share, go 4 days a week perhaps, swap salary for longer holidays etc.

Companies and employers need to be flexible nowadays.

It is a shock to the system (especially when Baby Number 1 turns out to be twins !) but you somehow manage. I went down to 3 days. There are "easy" saves - holidays / restaurants / meals out / wine intake and then you have to cut corners and save. You obviously get at least 9 months and if you're thinking about it now, even better. Just see if you can save £100+ a month, say to yourselves you'll have one weekend where you'll stay in with a DVD instead of going out and save the money.

You will get child benefit (which I think is about £90 a month) and you will be eligible for the child care vouchers - try to see if both employers will offer them.

I also think that it is sometimes false economy to give up work totally even if on the face of it, the numbers don't quite stack up. You should get some help when the child is 3 and then when they start school, you obviously have less cost even if you're using after school clubs. We had really lean years when we were paying for 3 x childcare, but by me carrying on working, I've kept my salary / job and earning potential.

I agree re:false economy about giving job altogether or dropping out of preferred career. Continuity gives us stability in the job marked. Solid CV and so on....

And no alcohol saves too

I agree that the new tax-free childcare scheme is worth you looking at, as you are each earning under £150,000 so will be eligible for that in Sept 2015.

www.gov.uk/government/policies/helping-people-to-find-and-stay-in-work/supporting-pages/introducing-a-tax-free-childcare-scheme

When my DC were young I worked Saturday mornings and Tuesday and Thursday evenings as a home care assistant. That way I had lots of time with my DC and most of the weekend for family time. I earned just over 800 per month (10 years ago) and had no childcare to pay out. Would you consider doing something like that?

Hi,

I work for the NHS and had my first baby a few weeks before I turned 32. My baby is now 10 btw! Our mortgage at the time was £323 a month so your mortgage looks huge to me! I am up north though :-)
I had no choice but to go part time down to 2.5 days as childcare was a BIG chunk of my salary and I wanted to be part time anyway. We have no family help. I use childcare vouchers. Baby no. 2 arrived when I was 36 so My firstborn was about to start FT school a few weeks after I went on maternity leave. So, it meant I wasn't going to be paying full day childcare for 2 children on my return to work. We were lucky to get a little help with tax credits but they have changed the threshold now (we no longer qualify for help). The first year I was back at work HRMC used my maternity leave pay as my income so I got quite a bit of help (£500 every 4 weeks) for that first year.
We moved house (4 bed) and I changed hospital with a few more hours. Mortgage doubled but we were paying it off faster. Child no.2 started school.
It is expensive but you may be better going part time. I am always asked to go back FT.
Consider teacher training for your boyfriend after his degree! School holidays are worth gold...take it from an NHS worked who hardly gets any!

Consider if you could both condense hours into 4 days. So you say you work 37hrs. That could easily be done in 4 days instead of 5. So then you save one days childcare a week. If partner does the same that's 2 days saved. Actually we work 12hr days here usually so I would look into 37hrs over 3 days. Then your home 4 days. Partner does the same and you can potentially just pay one days childcare if say you work 12/13hrs mon, tues, wed, and partner does wed, thurs and fri. So just wed needed. A nanny for one day would be approx £140 .

Once child is 3 you would get 15hrs free, and could look at getting an au pair ( does max 25hrs a week)

I think you need to re-look at TC's tbh.

We have a similar income, 2 dc and we aren't eligibly for ANY TCs at all. The last time I looked a few months ago, i'm sure the upper cut off had gone to something like £36k?

Do you have any big debts or expenses? Because it sounds kind of doable to me...

Between you, after tax, you have about 3200 a month, is that right?

1200 on mortgage, let's say at worst, 1000 a month childcare. That still leaves 1000 a month for bills and food. That seems doable if you get a good budget in place, meal plan, use freecycle, etc. And it could be more if you get vouchers, can work evenings, etc. Every little increase in pay will help.

I would definitely tough it out for 3 years rather than quit.

After much deliberation and thought I've chosen to give up work for now to SAH with DS. We planned it, financially it's ok and it's what I've always wanted to do when my kids are little.But it's hard. I can't imagine what it must be like to be "forced"( crap word for it but YSWIM) into because the numbers just don't stack up. If you like your jos it's worth keeping it, especially if you're only planning on one child, so that you've something to go back to (I work for myself and will more or less be able to pick up where I left off).
I know what you mean about the shocking costs. I think I always thought of things like buggies and clothes as being expensive but it's childcare or salary loss that's the killer.

Dreaming if outside London and commuting I'm assuming it's more like: say £3200 top, then:
£1200 mortgage
£600 commute (£300 each) - (its £57 a week just for dh and I to use tubes in zone 1-2, so £230 ish a month. Increases a lot the further out you are.)
£1000 min childcare ( cheapest around)
£300 bills ( council tax £150, plus heating/ water/ gas/ electric)

That leaves £100 a month for all food/ clothing/ random.

My partner and I added up the rough cost of childcare to date a shrike ago( two DC one at school one still at nursery). It came to.......wait for it..... 70k so far ( and counting).

After the costs of childcare, running a second car( for my work) and buying more expensive food etc to offset me not being at home to cook etc, to be honest it would have made more sense fir me to have given up work .

However, am extremely glad I didn't as I now need to be able to earn and support myself which I would not be in a position to do had I taken 7 years out of my career.