We have 3DC one of whom is under school age and is currently getting 15 free hours, which would increase to 30 in sept. He goes to school in Sept 26. I manage my income to pay into my pension and stay under the £100k threshold. DH earns under £100k anyway. My pension contributions are around 15% on top of the 10% my company puts in. Last year I paid two thirds of my bonus into my pension.
I have just been told my bonus amount for this year which is more than expected. To stay under £100k and keep our childcare benefits I would need to put it into my pension, and increase my ongoing pension contributions to 20%+.
If I take my bonus I would be taxed at full rate and lose all my personal allowance - but I would still get paid a good amount after tax. Going forward I could then slightly reduce my pension contributions and have slightly more money each month (whilst still paying a decent amount into my pension). However our net childcare cost increase for the next 12 months would be around £5k total I think (need to double check this) as a result of losing the free hours / not getting 30 free hours come sept.
Obviously logically it makes sense to max out the pension and keep the childcare benefits for the next year - but this will restrict us in creating savings outside of pension and for our children. We also have some credit card debt which is on 0% for the next 2 years which I am slogging through paying off and after this plus big mortgage etc. there’s not much left for additional savings at the moment. This will obvs change once DC are all in school and CC debt is paid off.
WWYD?!