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.

OP just want to say congrats and how inspiring it is to see a woman doing so well and having a great career. Enjoy your new job!!

Also want to say congrats OP. And while I get some of the other points, as a mid 30 female in a mans industry I really feel we should celebrate that females have these problems rather than shout them down.

If you don't mind sharing what was the end band you ended up at gross all included?

I am in a similar position, having had a big promotion six months ago and am around £120k with car allowance and bonus included. Didn't understand I was entering this slightly odd tax bracket. Apart from buying extra holiday I can't seem to find other ways to manage it. I don't want to move money into pension as my DH is self employed and I am the main earner. Have thought about swapping car allowance for car but your thread has made me think that actually reducing cash salary might be worse as would move me to £110k when need to keep punching through the bracket?

Clearly need to find an IFA but thought worth asking.

You need to get you in one to £100k with pension contributions or VCT. Over £100k you lose your PA and end up paying 60% tax for that short band!

I think when women achieve, I think the real hatred comes out. I imagine that the road to your career has been a hard one requiring lots of personal sacrifice.

I meet women like you and they rarely come from privileged backgrounds, but have real focus and determination.

Don't let the haters get you down

The government has really clamped down on benefits in kind. Most salary sacrifice schemes are ineffective in reducing tax liabilities these days. I would suggest speaking to a specialist financial advisor before making applications.

Agteacht I will be PM you.

littlebillie, yes it has been incredibly hard at times. Looking back I didn't even think about it, just gritted my teeth and got on with it. I remember incidents like being in a&e with DC past midnight, dropping off to relatives the next morning for emergency childcare and then in for work at 9 (DP was away at the time). I actually think I could've given myself more of a break without it being an issue but at the time it just felt like what I had to do.

And this was all travelling around by public transport with a child and supplies etc!

@ovenglover

I’m a teacher, without my profession people like you wouldn’t have had the education you needed to earn your huge salary. People like me earn on average £30k a year, also work 12-13 hour days and don’t even get the luxury of weekends to see DC as Sunday’s are usually taken up doing planning and marking. I can’t miss work for DC doctors appointments, can’t take the day off to be able to make that 8am phone call and yet don’t get paid a high enough salary to afford a nanny! Please don’t imply people on lower salaries work less hard, less hours or have a better work/life balance. We don’t. And we do it all on a salary that means I can’t afford a big house, a nice car or to treat my DC to the cost of a non term time holiday when I do finally get some time with them.

I have just read back my posts from October @Purplepricklesalloverhisback and I really don’t think I’ve implied what you are saying. Two of my friends are teachers and working 12-13 hours a day all year round is incomparable to teaching. My teacher friends don’t need nanny’s because they’re off work at the hardest parts of the year! I would also book my dd vaccines etc in one of the many holidays you have. I had to save my holiday for when dd was sick. I got 22 days annual leave plus bank holidays. Try fitting in all doctors appointments/holidays/dd off school sick days in those minuscule days off.
Daft comparison.

My hardest parts of the year I mean the long summer holidays stretches btw. My dd has 8 weeks off. She’s 5. With no help with childcare I am forced to stay at home unless I continue to hire a ft nanny whilst dd at school. And I self taught myself my qualifications in my career after my school let me down. Don’t be so presumptuous.

As a teacher you will still be entitled to childcare vouchers and tax free childcare.

@ovenglover
The cost of childcare for young children for teachers is all year round as nurseries don’t take them term time only. When they are school age I appreciate I won’t need to fork out for holiday clubs every day as I will be home. But I still need to work during the holidays and so in a 2 week break usually need childcare for at least a week of it.

Yes the very few vaccinations they need can be scheduled during my school holidays, but sadly them being sick doesn’t tend to fit that schedule.

@ovenglover if you put your DC in state school rather than private you won’t have 8 weeks to cover it will only be 6.

6 is as difficult as 8 so that’s just a daft comment. Sorry but I worked happily ft until dd went to school. Then I found it very difficult to find childcare that wrapped around school. I chose a private school simply because eventually as dd gets older their wrap around is better than a state school.
At 5 years old the school day is not long enough for me to work and I’ve found it very difficult to find childcare between school and when I’d get home. All nurseries in my area did not open late enough for me to get home on time from work to collect dd hence me having to have a nanny, a Nursery wasn’t an option nor was a childminder. I used to get home at the earliest 7:30pm but most days about 8pm, I’m surprised as a teacher you found yourself doing this and can only suggest you move to a closer school, something I’m not able to move closrr.

I also continued ‘working from home’ when I got home but could manage to entertain dd with the tv or an iPad as she got older. Again an incomparable situation to yours I believe and also my points were, I lose all my benefits as a result of dh earnings. So even if I wanted to be a teacher and receive help, I can’t. It’s ridiculous as is the tax system at the salaries the OP is speaking about.

I love the snide comments and green-eyed haughtiness from those above pointing out that she earns so much and therefore should pay her own child care.

It's worth pointing out that her higher taxes pay for these freebies for you and your children.

All parents, whatever their income, should derive some benefit from the unfair and ridiculous tax system we pay into through the nose.

For my own circumstances, I earn over £100k and my wife earns nothing as she is on SMP; however, we cannot access free hours. Bizarrely, if I earned £99k and so did she, so about double our current household income, we are entitled to 30 free hours.

Who thinks that is fair? How can that be justified?

A 100K is a lot compared to 23k; however, where it supports a family of 2-3 children it’s not living the life of luxury. I paid over £50k in tax last year so it’s not much to say that I resent having absolutely no help with child care. If I got my own money back I could afford to pay childcare easily; no but that money has to be used to provide it for other people.

Is it the case that people think that taxpayers should pay for their child care because of its expense, but have no savings for their own child care? Talk about being self-serving hypocrites!

OP sorry you're getting such a roasting - dh had to just push through that salary band and hope he didn't stay there too long, so I guess it all comes down to your plans...he then faced the scenario where his pension was topped up to the max and he was having to pay tax in excess of the pension contributions for every £1 he was given he had to pay back £1.05 - which is clearly crazy and he couldn't stop his employer making the contributions! Anyway it's not exactly something anyone is going to feel justified publicly complaining about - we quietly grumble occasionally in private.

Sorry for jumping on an old thread but OP, I’m interested in what you did in the end. My next pay rise (which I’m expecting this year) will push me over 100k so already looking into what I should do. I need to speak with a financial advisor but before I do, just thought I’d ask.

also I hate all the negativity on this thread. Good for you for being a high earner. As my hubby says, “we all choose our jobs”.

xx

Just g6it this situation too. Lone parent here too so already have a tax accountant and just contacted an Ifa. If you haven't maxed out your pension In the previous couple of years you can back use this allowance to take the salary below 100k.
2 people earning 50k take home a lot more but it seems as soon as 1 person earns 100k you are expected to live in a mansion and pay a nanny full time.
I wouldn't recommend cutting hours unless you are sure you won't be doing 100% work in 90% pay terms.