Go PT and get UC or not?

[Whunt18885]

Hi

My wife and I recently (15 wks ago) welcomed twins into the family so we now have 3 kids total instead of the 2 expected!! Its been fab albeit hard work.

Anyway she is on Mat. leave at the mo from a £31k a year job and I am still working FT doing my job. I earn £25k a year however I am due a pay rise so expect that to go to £26k in April.

Anyway when my wife's Mat leave ends later this year she will need to go back to the office at least 3 days a week and work 2 days from home, I mostly work from home but I am usually on various site visits throughout the day.

With that in mind we are likely going to need to put the twins into nursery and even with the 15 hours free per twin and the Gov childcare account that tops up 20% and the non means tested child allowance thing that we get we are still looking at £300 a week in fees!

So its the age old question should one of us quit or not.

However given both of our careers rely on us both 'keeping our eye in' as it were I was thinking maybe I could go part time either in my current job or within a similar role part time elsewhere, I have 17 years experience so I don't think I will struggle to find a suitable role even part time.

I did a check just to check and basically based on working 16-18 hours a week part time and my wife returning to work full time and us paying £300 a week childcare fees I would end up with £1200 universal credit top up which given the after tax salary of say £900 a month would give me a total of over £2k a month.

If however I stay working full time I would be on around £1800 after tax but we would still need to pay £300 a week in childcare and the UC amount is significantly lower.

Based purely on the maths it would make no sense for me to stay working FT when I can work PT and effectively get more £ than if I was FT and still have more flexibility to spend more time with the kids, do more stuff around the house etc.

My only concern is that we wanted to move house next year when the mortgage rates drop (hopefully) and I wonder what the bank would think about effectively porting our mortgage with an extra £80k borrowed to get a bigger house.

Our combined income if I went P/T would be around £46k a year which is much less than the £57k if I stay full time however we would be borrowing 'only' an extra £80k and given our perfect track record I cannot see why TSB would refuse but I simply don't know!

Any advice from anyone who has made a similar move?

It is COMPLETELY STANDARD for this thinking to happen when the female is the lower earner. You see it hundreds of times a week on this thread with the justification that it has the least financial impact when the lower earner reduces work to provide childcare.

But not so here. 🤔

I've not run those figures but as others have said I would ring CAB and get an accurate calculation OP. You have no rent element and any money that seems high would go to childcare costs. I think jointly you have a fair income so as for retraining... if only!

@OneMoreTime23 I don't care if it is COMPLETELY STANDARD thinking. The OP mentions nothing about reducing their working time to provide childcare. They are still talking of sending the children to nursery for the same amount of time and financial cost. By 'Female', do you mean the mother? You can say woman and mother here.

I didn’t initially read it that way. The mention of the “age old
problem“ and talk of being around for the kids and housework made me think that was the intention.

but I see what you’re seeing now.

It's important to consider the impact on your pension for a dropped income and how easy it will be to get back to FT work if you drop to PT. This is a huge struggle for lots who take this path.

You'll be encouraged heavily by UC to seek more employment when the twins are 3 years old.

You also will both need to be earning the equivalent to 30 hrs at NMW to get the tax free element and funded childcare.

I get it. I had one on FT nursery and it was £1200 pm and crippling. Going PT is lovely if you can afford it without UC. I'd hesitate to actively plan to become dependent on it though.

£31k DW £2092pm
£26k DH £1808pm
Total wage £3900

16-18 hrs pw DH £12480 £1040pm

UC
Couple rate £578.82
Child 1 £269.58
Child 2 £269.58
Child 3 £269.58 (excepted due to twin status)
Childcare £1200 (I've used your example figure - be aware that you can't claim the tax free childcare and UC at the same time)
Total: £3208.74

Deduction both FT (£3900-£631)x0.55=£1797.95
Deduction DW only (£2092-£631)x0.55= £803.55
Deduction DW FT, DH PT (£3132-£631)x0.55= £1375.55

Total award with both working: £3208.74-£1797.95=£1410.79
Total income with both working: £3900+£1410.79=£5310.79
Total award with DW working FT and DH working part time: £3208.74-£1375.55=£1833.19Total income with DW FT, DH part time: £2092+£1040 +£1833.19=£4965.19
Total award with only DW working: £3208.74-£803.55=£2405.19
Total income with only DW working: £2092+£2045.19=£4497.19

It always pays more to work with UC. The other thing to bear in mind is that although there are top limits to childcare on UC, the childcare has to be reasonable for your work commitments and travel. So you can't claim 40 hours of childcare if you only work 15 hours and travel 5 hours. The exception is if the shift pattern is unpredictable so you have to secure childcare for the whole week.

Surely you can't choose to go part time and be topped up by the government?

I got broadly what @Lougle got - except Childcare as you'd only get 85% back. So roughly 85% of £1200 = £1020 or 85% of £1300 = £1105.