Childcare when earning over 100k

[Bathroomwoes]

There have been a few threads on this topic but none of them seem to bring together all the issues in one place. I'm currently earning just under 100k and am looking to change jobs. I'm looking for a sizeable salary increase to move and am mostly looking at roles in the 110-130 band (not actually received an offer yet but this is market pay for my level and role). What I've realised is that If the taxable income goes over 100k I lose 4k in tax free childcare and I also lose the 30 hrs free childcare I've been counting on, which I would otherwise be getting in a year. We're currently paying a fortune in childcare (combo of nanny and childminder) and I was really looking forward to actually having some disposable income again as we are having to be quite careful and put many costs on hold.

I calculate the total cost of those childcare support losses in the region of 7k. If my taxable income is around 123k then I'd lose my personal allowance too. Therefore of that 23k I'd effectively keep nothing?? I know I can mitigate by making extra pensions payments etc but that probably only applies up to a max income of 115 - 120k as I wouldn't want to be putting huge sums into pension. One thing that could help is leasing a low-tax model of car as we do desperately need a new car. Does anyone know more about how this works and whether it is universally available or only in some companies?

The issue for me is that If I go for one of these higher paying roles I will have to work harder and have less flexibility in my work. I'll need to spend more on childcare and more to manage our family life in order to hopefully maintain the quality of our family life. It's making me think I should actively avoid roles paying between 120 - 140 and only apply for roles above or below those salaries. I know it seems short-sighted but my intention is only to stay in such a role for a couple of years and then quit to do something completely different. Therefore it is quite short term decision and I'd like to make as much money as possible to make it easier to then have some savings for when I change direction. If I go for a 140k+ role I can't count on having any life at all so not really keen to do that but it is an option on the table.

The reality is also that higher paid senior men and women have far more choices and support than their lower paid peers

Can you explain what you mean by that / what you are basing that on? It isn’t my experience so I would be interested but to know.

@MisstoMrs I’m also interested to see this. I actually quit work because I was so sick of trying to fit dd doctor app in etc because of a complete lack of support from my company. Ime no one at exec level had it easy to simply ‘be there’ for your family.
I worked 13 hour days mon-fri and saw dd sat/sun, missed out first two years completely as dh . A very rare occasion I got a lunch break.
I once requested to attend dd vaccinations but 6pm the night before the day of them boss says I have to be in meeting 7am the next morning. This then requires me paying nanny extra hours, me being out the house more, missing months in advance vaccination appointment for dd and I can forget using the nhs. They don’t work for people in jobs like this. I have to phone up 8am and hope for an available dr appointment. I can’t take a whole day out to possibly attend dr. I pay for my appointments now so it does cost money to be at this end of the salary spectrum I don’t know anyone else with help to be at home, you just hope the benefits outweigh the costs in the end. You earn this money. It’s a choice but it’s not easy at all!

I think that most of us have to take a hit on disposable income when our children were small. Sometimes the preservation of sills and experience makes it worthwhile in the longer term to work for hardly anything. I would have thought if you have the chance to move up the ladder by changing jobs it will be worthwhile even if in the short term you are taking home less. It will only be a few short years before the huge childcare costs reduce.

Can you explain what you mean by that / what you are basing that on? It isn’t my experience so I would be interested but to know.

If you are in a senior role in most FTSE 100/Fortune 500 type companies or their equivalent in specialist partnerships you are far more likely to have access to a range of benefits which senior responsibility roles in lower paid industries don't have. So for example up to a year on full pay for parental leave, buying extra holiday, structured policies around family leave which are more generous than standard. Good pensions schemes, good advice around finances to help with tax levels, premium health/travel care etc. In addition trying to prioritise people's family circumstances when assigning specific work. Generous Leave of Absence schemes, career break schemes. There is often a great deal of autonomy in the work and flexibility in how it is done.

Companies like this want to retain good staff who are highly valued. Specific will vary but these benefits exist in most of the top companies. I'm sometimes struck by the extent these are taken for granted.

Many of these are benefits simply don't exist in roles of high responsibility in lower paid industries. Hospitality springs to mind as particularly poor but public sector also has a lot of senior roles with no "perks" and poor pay compared to big corporation private sector.

However some the roles by definition are just not family friendly, either because of hours or travel or some other issue. This is equally true for men and for women.

Hence despite offering very good benefits, we have people who move to clients or to more static roles for a few years with young children despite all the benefits and the aim is to keep in touch because they often return further down the line.

Does that cover what you were asking?

It’s a choice but it’s not easy at all!

Yes this is very true. Anyone who continues to push upward at this level will end up making significant family sacrifices - its not surprising people choose to work at level during this period or move jobs. Especially when you know that you will have a year or more of doing the 'extra' before you see any real benefit.

@C8H10N4O2 I think we will have to agree to disagree. Most of the benefits you describe would be open (or not) to those earning significantly less than £100K, with the exception of autonomy, that I agree, comes with seniority and the related £££s.

DH chose to push through mainly due to personal drive/ambition/job satisfaction. We didn't have a dilemma that you seem to which should be all the answer you need really.

Yes, you'll lose the personal allowance at £123K and then you face pension relief taper at £150K which reduces the tax relief on annual pension contributions on a sliding scale from £40K to £10K once you reach £210K. Ironically, DH is nowhere near the £1m lifetime allowance which is apparently the main reason why doctors are retiring early from the NHS.

It's nice that they taper the pension relief but why not also the childcare support

I'm also less bothered about the loss of the personal allowance as that too is on a sliding scale.

DH is very senior and yes he has flexibility but that flexibility works both ways. Between now and when I leave to join him with the DC in December he is home for 5-6 nights. I'm doing everything with two sitters backing me up as we have zero family support and I also work FT. It's expensive. That's where our money goes.

In January he will be home more but he is always available. Customer or employee calls he has to take the call and solve the problem. We regularly get calls at 3am and he picks up because that is what he is paid to do. He wouldn't do it for £100k because the costs are too high.

The notion that there are special benefits available for people like DH is laughable. There are zero special benefits. That's why my childcare bill is so high.

@C8H10N4O2 it does not answer me but I don’t wish to argue. My dh is still at exec level and my nanny previously worked for people much higher up the food chain than us.
Some mornings my husband wakes up and realised he’s got an email saying get to the airport for your flight this morning.
I wave goodbye at 5am and never know when he’ll be back.

How do you come down from that level easily when you’ve worked so hard to achieve it, made many many sacrifices to get there and when dc come along apparently you’re supposed to just carry on and also afford childcare at your expense with no extra help, in our case it’s ended with me giving up work because unless we spend a great deal more than we did on a nanny I would have a breakdown, no break for me plus FT work (our nanny worked 7:30am-7pm so not exactly cheap, indeed you basically take on a FT employee salary at your expense) and as dd got older it became more and more difficult to keep up with school stuff so again we either hired a tutor to help or she falls behind others who are getting help either at home or tutored, yet another expense. The costs involved in staying in these jobs a very real.
We get no ‘perks’ of exec level other than pay. And that pay is divided up when you have a family, nanny’s, tutors, basically everything to replace what parents at home more are available do. Of course if my dh needs to come home and he’s in the uk he can but that isn’t guaranteed so we had to hire FT nanny because it’s more likely than not someone other than us had to be there.

In a job my nanny worked in, both parents were away a lot. The nanny slipped and broke a bone. She worked through that week to care for the dc until the parents came back as she knew no one else could be there for him. Even if the parents ‘came home’ immediately, one was in the USA and one was Africa, wasn’t exactly a quick dash home. It is very difficult to maintain this career. That boy is now in boarding school. Should one of his parents given up their respective careers to stay home more? If so which one? They were both very talented individuals. Luckily for me and dh I wasn’t as talented as him but saying that I wish I was, I’d happily let him stay at home and I work.
It’s so much more complicated than, you’ve got the money.

But anyway I digress. OP I wish you luck for your future choices. Childcare doesn’t last forever so hopefully you’ll break through to higher salaries soon and work out a way to make it work.

An orchestra of tiny violins is playing Beethoven's 5th Symphony on this thread - can you hear it?

#snidecomment
#heartbleeds

#knewishouldn't have opened this thread because it wouldbe annoying

I’m sorry you’re getting such a hard time, OP , but not surprised.
If you’re not wearing a hair shirt & eating soil on MN sometimes, you are deemed well off and stoned for being above your station.
Earning over £100k doesn’t make you rolling in £50 notes as your expenses increase to support it.

I don’t have advice about your childcare question as I’m out of that age range now, but I completely emphathise. When I lost personal allowance i was paying nanny, high commuting costs, South East mortgage, so I definitely felt that I wasn’t experiencing my expectation of a high earner lifestyle.

I did put a fair amount extra into pension which helped, but realistically it was when DCs were more autonomous in secondary school that things began to even out.

My advice is to continue to progress as far as you can with your career... it’s hard one, and you deserve it.

I thought I'd give an update for those who were so helpful in providing advice.

I decided to avoid the jobs that would require long hours and involve a high amount of unpredictability and go for somewhere I could expect a better work life balance even if for a slightly lower salary (essentially, client-facing vs working in the business).

In the end and to my immense surprise and joy I have managed to get such a job but at the higher end of the range I was looking at! And with great development and progression prospects.

The reason why I'm posting this is because I never thought I could be lucky enough to get a job like this, I always saw my career as something to escape from as it didn't allow for a good family life, unless you took a huge pay cut and accepted that future progress would be slim to none. I wish I had known more about the possibilities out there when I was younger as I would have invested more heavily in my career. I only kept going with it in the short term due to other personal factors.

In terms of my original questions- I may end up having to take a tax/childcare cost hit in the short term but now it feels worth it for the long term.

All in all a wonderful result for me and I am going to have a think about how I can help women more junior in my field make informed choices about their future.

Well done that’s great news!

Hi, totally understand your situation, low tax car would help ofset tax and there are loads of deals universally available. If the company arn't offering the one you want many would be willing for you to put it through them.

Other than that I'm afraid its at that awkward amount where you will be wondering whether you would actually be better off. If your moving up then go for it, even if you dont see much much financial gain, you will next time!

it might sound a lot of money to others considering the average but its easy to just look at the total as being the 'in your back pocket now' amount which its not. Considering VAT paid on everything there's over 50% of that salary gone! In my case I had 40K hanging round my neck at 26 before I'd made a penny in wages or anything to my name! I started on 88K which I thought was loads at Uni but I was struggling to get by when i met DH. People think its a tonne of money as i'm sure we both did at one point, for me it wasn't close to enough for how hard id worked for it and my circumstances to get there meant debt so at times I was struggling for bus fares like i was unemployed.

To suggest no cutbacks are needed and money doesn't have to be carefully kept an eye on at the 100k salary level. Wow you're not even close. Without counting what your spending that could slip away in a week. If your not considering, and even considering closely what your spending even on a 100k salary, your an idiot, which is why OP is asking the best way.

Good on anyone for bettering themselves and their family because its not usually the case that a good salary comes from sitting on your arse all day whinging about what other people get. No one prevented you going out and doing well.

Hope you make the right decision, if you could do with a new car you might as well, but other than that there's nothing more worth justifying if its not something you'd buy anyway or are prepared to jump through hoops for (laundering cloaths at work as uniforms etc etc). You'll be on the salary i'm sure your worth in no time.

Lower your living standards then...I’m struggling to live off 15k a year

Raise your prospects then!
Your not the victim because someone earns more than you do. That person also pays much more tax than you do not just the figurative amount but the percent of money they have worked for that goes to somebody else

That's a fantastic update! So glad it's all worked out well for you. Well done!

I didn't see this thread originally but having read through it, I think you got an unnecessary roasting! I work in part time care at the moment so fit around family life, but we should be celebrating women who are successful, not berate them. If I have a daughter, I will encourage them to achieve what ever they want.

Anyway, congratulations on your new role. I hope it all works out for you

@Bathroomwoes congrats on the new job. I know you have it sussed now but I just wanted to let you know that when you're self employed you still get your 30 hours for the first year - as long as you don't earn over £100k.

You need 30 hours free childcare when you're earning over 100k a year? That's insane.

Excellent news OP! Congrats on the job.

I fully sympathise. The 100k+ tax rules are beyond loopy. I initially started the year expecting around 80-90 but have hit more like 110. I have stopped working now until the tax year as with the reduction in personal allowance there is an effective tax rate of 67%. Not worth it.

I don't have to worry about the free childcare hours yet but when I do I will damn sure not earn over this amount. It seems crazy but after I pay insurance for extra work as well I would see minimal increase for a lot of extra time away from the family.

And I am in a desperate shortage profession that they need all hands on deck for... Plus worrying it would be even harsher with Corbyn in power wanting those over 80k to shoulder more tax.

Well done OP. My dh is in what I call the ‘annoying tax bracket’ last year his bonus pushed him into losing his personal allowance and we’ve just paid the tax bill yay.
Annoyingly now he is literally just over the highest tax bracket so we lost all benefits & all tax free childcare. I really want to go back to work but previously we relied on the childcare vouchers etc as childcare round my way is very expensive and we have no help.

It does annoy me that the government decide that not only my dh but also for me that I’m no longer entitled to any government help as well even though I’m stuck being unemployed. Oh well. We are ok but by no means at all well off and live in a tiny house in south east.
Good luck with the new role.