Nursery costs in London, any tips?

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Hi there, I'm currently pregnant with our first child and I've looked into childcare costs in Bow, London where we live and have been shocked at the prices coming back - e.g. this morning - £1580 per month (plus an 18 month waiting list so we'd have to apply now). This is not far off our mortgage. My husband and I are on reasonable, professional salaries - or so I thought - but this cost is enormous.

We normally have about £1000 left over each month after bills/living costs etc which we'd normally put towards holidays etc but we bought our first flat in late 2018 and every penny over the past 1.5 years has gone into costs associated with this as it was a neglected ex-council flat in Bow (East London) so we have no savings and there are still house-related things we'd need to do or pay for before the baby is due. Also, we'd need to somehow need to save an extra £580 from our normal living expenses just to pay for nursery. We already don't have a car, rarely eat etc so I'm not sure where this money will come from.

We have no grandparents who could support with childcare. Are there any better options out there? I feel like we're taking on the impossible trying to have a child in London. We considered moving out back in 2018 when we bought our flat but we're not from the UK originally and if we left London we'd have zero friends or support network. Also, there are few jobs in our fields outside of London. I'm also now 40 (it took almost 20 years to get on the property ladder with current house prices) so it's not like we can put it off until we're earning higher salaries.

Any help appreciated, we don't know anyone with children in London.

Thanks!

Stop over paying your mortgage now. Build up savings. Save now! Even Netflix, you'll be glad of that 100 a year.

Depending on your salary split with your partner you might get full child benefit. Do the maths now. Bear in mind that the amount is after workplace pension is deducted (so a 66k salary if you have 10% going in to your pension is where it all has to be paid back).

Check the maternity and paternity policy at both your employers. It might be better for the husband to take time off work and mum keep working if she gets statutory maternity but the gets 6 months paid.

When you bought your flat didn't you budget for when you have children? You were trying presumably...

You can make it work if you sort a budget, and are sensible. There are options like mortgage holiday, stop paying into pensions etc, but you shouldn't get that drastic on your incomes unless your mortgage is crazy.

We had a combined income similar to yours, and the lower earner became a SAHP. The cost of nursery for 2 meant it just wasn't worth working, and you don't see your children.

Watch out for the child benefit hole. For us the higher earner got a decent payrise that meant child benefit for 2 had to be paid back on top of the 40% tax. So 10k payrise, 6k after tax, 4.2k after child benefit paid back. Yes, a 58% effective tax rate. The most depressing payrise ever!

Do your sums now.

Childminders.... Normally about £4/£5 an hour.... Cheapest option their is....

Or move out of London

When i worked in a nursery...
People use to put their name on the waiting list when they just started trying for the baby (honestly)

@Rollercoaster1920 our split is £43K/60K, I'm in the lower salary. My husband gets 1 week paternity so pretty rubbish. I get 12 weeks full pay, then half for 6 weeks, then statutory.

What's child benefit? Is it different to childcare tax credit where you get up to £2K per year?

Thanks

@Rollercoaster1920 p.s. we are only planning one child, two would be too difficult, plus I'm 40.

Sorry OP I don't think you will get child benefit as your husband earns £60k

What's child benefit?
Oh gosh, the younger generation...
It's what your granny used to pay for your mum or dad's food when your grandpa wouldn't give her any housekeeping.
If your DH earns over £50K you probably won't get it. But if he cut his hours you may well get it.
Look up his parental leave package. You don't have those figures right as one week statutory is not legal - they have to offer two. And parental leave is different.

@drspouse curious to know how old you are. OP is 40

Child benefit. Google it to see how to apply from the government, it is about £1000 per year for a single child. If your husband pays into a work pension you'll be eligible for some (the 60k cut off is income AFTER pension, NOT salary). So if he pays 8% into pension you'll get just under half child benefit. Also if his company don't pay full rate during parental leave you'll be eligible for a bit more that year.
Even if he gets a pay rise and moves out of eligibility then worth claiming so you get NI credits if you are not working.
Welcome to tax return fun.

I doubt you will be eligible for any tax credits.

If you can both work 4 days per week you'll only need 3 days childcare, you'll pay a lot less tax, and get child benefit.

Thought of becoming a childminder for a few years ?

We ran a deficit for a few years until the free hours childcare came in when dd turned 3. It was a tough few years with no extra cash but I was still able to work, progress my career with no gaps. Sorry this doesn't help. Kids in London are expensive. Does your work offer childcare vouchers?

@bananacakerox you can't sign on afresh to childcare vouchers any more, but tax free childcare is still available.

@drspouse I'm about 10 years older - OK, I know I have DCs already so we do get child benefit, but surely most people know what it is from their own childhood?

I've just @ myself! That was to @Threebagsfull730. There's an interesting thread in Feminist Chat about child benefit currently.

We are in similar position in London/salary range. FT nursery is £1850pm.
We looked at a cheaper one (£1500) but it had horrible atmosphere, workers snatching up contented babies and plonking them down crying.
Most people in our area seem wealthy enough to use nannies, so the few nurseries are very oversubscribed.

The OP isn’t from the UK originally, hence they haven’t heard of CB from when they were a child.

OP sounds like you’ll get the tax free childcare, but probably not much in the way of child benefit.

Childminders are cheaper than nurseries generally.

The OP isn’t from the UK originally, hence they haven’t heard of CB from when they were a child.
Apologies OP!

In any case, even parents of slightly older children will be talking to you about "paternity leave" (two weeks for dads) and "maternity leave" (months and months for mums) when it has now changed and can all be shared. Your DH may well get a good package of employer-paid shared parental leave and it may be better than yours, and in any case he MUST get two weeks, not one.

If you can survive for a year then a local authority nursery schools will likely be cheaper. This one starts from 2 yrs for example www.localoffertowerhamlets.co.uk/organisations/23237-old-church-nursery-school

I would also say you will have a preferred nursery when you visit them all. It's not always as simple as saying cost will be the determining factor.

My own experience, we saw some cheaper ones and the staff were enormously disinterested and the babies looked so sad. The expensive one we chose has amazing staff who are warm, loving and experienced and it's been such a relief as my son is very shy and cuddly - he wouldn't fare well in a big nursery with staff that leave you to it. (Though I have friends with babies who wouldn't mind this at all!)

Op, I would look at nurseries in cheaper areas. In London travelling a mile or two to a cheaper area (and in London the affluent and not affluent are side by side) can save a large amount. I live in a less affluent part of London (but similarly central to you) and the costs are just over half what you are quoting.

Also there bear in mind that it's a short term cost: at 2 fees decrease a bit, then significantly decrease at 3, plus you get the funded hours.

Good luck!

Remember you'll get paid for your annual leave while on mat leave. If you get say 30 days annual leave plus 7 days bank holiday you could do 4 days and paid for 5 for about 7 months

Sorry I mean you accrue your annual leave and either get paid for it or can take it when you're back. If you take the 37 days and add your current year annual leave that should last you a year if you don't mind not having many holidays...

@welshweasel where are you if you don’t mind me asking?

@LockedDownKnockedUp Abergavenny

@welshweasel thank you. I’m in Cardiff and looking in to child care costs (expecting our first), it all still seems so extortionate. How old are your little ones? Does it get slightly less shocking in terms of cost lol?

I think they’ve stopped childcare vouchers etc now and only have the tax free child care, meaning we’d save a very ahem generous £1000 ish a year off a cost of £13,500 if we put the baby in full time! Did you use a child minder or a nursery? (Sorry for all the questions, it’s this evening’s pregnancy worry 😂🙈)

Mine are 4 and 18 months. Prior to covid the 4 year old got 20/30 free hours which makes a massive difference. We also get childcare vouchers (rather than tax free childcare). Fulltime is £43/day, we get 10% discount for second child.

Since covid we get free keyworker childcare. In September the big one goes to school so will only have to pay £10.50 a day for after school club.

But yes, it’s our biggest outgoing after our mortgage. We’ve always used nurseries but I think childminders are a bit cheaper.