Balancing PT v FT work with childcare - costs etc

[panicstriken]

Hey all

It seems very odd that I am battling to get to grips with decisions like this before my little ones even make an appearance, but I know I will be so bogge down after, I may not think straight!

I am expecting twins in a week or so. I am currently planning to take 12 months maternity leave, returning perhaps Feb next year. However, whether to go back FT or PT is one thing I haven't worked out yet, and don't understand how you make that decision until you understand things like tax credits/child tax credits and balance that with nursery fees etc.

I am perhaps edging on the side of going back 4 days a week, which will mean a drop in wages. But quotes I am getting in from nurseries to date are around £45 - £50 per day per child, and obviously with twins, this soon adds up over a week. I expect to be paying in the region of £400 per week for childcare and will probably be lucky to earn in the region of £25k when I return to work PT. My partner will be working full time but earning less than I.

How and which way around is the best way to make this decision!? Where can I find out accurate info on tax credits etc and how it all works (i have read the direct.gov website and the HMRC sites, but cannot make head nor tail of it all at the moment), and is it perhaps worthwhile me thinking of other alternatives (i.e. nannies/childminders rather than nursery?)...

Any advice welcome!

im not sure about tax credits, but childcare vouchers ( which come out of your pay before tax) are a real help in keeping costs down. When I was planning returning to work, I sat down with statements etc and worked out a full budget, then included cost of childcare, and worked out what I could afford to do. whatever you decide, it isn't permenant and will all work out in the end.

tax credits are very complicated and seem to be about to change so I would call their helpline and see what they say..
you might find that a nanny works out cheaper for twins than double nursery fees. Also some nurseries offer a kind of discount for a full five days meaning having them in four days doesnt help much

Maybe look at a new nanny route. Someone who has only been and au pair/ mothers help/ nursery before and wants to change/ move up will be likely to charge less. Live in would be even cheaper. Prices obviously depend on area

CM normally a bit cheaper especially if you could manage slightly shorter days - eg one of you goes in later and one leaves bit earler as often charge by the hour - depends on the area as well of course - pop over to the CM/nannies bit on here for more advice
you could possibly look at a nanny share as well
I think you will be over limits for tax credits

Hi there. I think it really depends on what you "think" you might want to do and then to work out the costings. Ring a few nurseries / arrange a visit, and speak to people (if you know anyone with children) about childminders / nannies.

I was also expecting twins - in 2005, nursery fees were around £40 per day per child. So, in theory, it should have been £200 per week/child, but as others have said, you'll find its say £180 per week / child (they give you a discount as you're taking a full time place - easier for the nursery). Most nurseries will also give you a discount for the 2nd child (mine was 10%) so it was actually £180 + £162 for 2 children / per week. Its therefore more cost effective to work more days.

I don't know whether the rules have changed, but I think you'll definitely be able to claim child tax credits for the 1st year. You used to get quite a decent payment for the first year (about £80 a month) of birth even with above average combined income (ours was £70k+ and we were still eligible for the 1st year). You can also get childcare vouchers - you save 30% on a part of your childcare costs (you and your partner can both claim it) so thats worth doing too.

I think as I've said above - the difficulty is knowing what you want to do and I suppose only you can do that. Get the information and calculate how much you'll come home with for each scenario (say 4 days or 5 days etc). Work out what the net difference will be. The reality will then be (for example) - if I work 4 days, I'll have £600 left after childcare / travel / expenses. If I work 5 days, I'll have £900. Would I rather have that money / do we need that money i.e. we have no choice, or would I rather have that day with the twins? You have to factor in your personality, your job etc. Ask yourself questions like Are you having more children? Do you have the type of job where you can still progress if you're a part timer? Are you looking forward to getting completely immersed in the baby / toddler group lifestyle (or does that sound like torture)? Will you enjoy having more time with the babies than you are at work? Will you be bored? Are you the type to fret about not having enough quality time with them / look back and regret it? I can only say from surviving those early years with twins is that its pretty full on - I absolutely loved it but it was hard work. I went back 3 days a week and found that pretty difficult (juggling home and work). I think full time would have been unbelievably hard. Good luck whatever you decide (twins are absolutely amazing)!

Mandy12 I am pretty sure the rules have have changed -limit around 42K now although do put in a claim OP- you may get something in the first year
do you or your partner get childcare vouchers that can be a saving too

Tax credit rate is changing as we got a letter to say we no long qualify. Limit Used to be £48k combined salary but now being slashed to £26k for 1 child or £32k for 2 or more. We are now unable to claim so won't get any help to cover the costs of childcare so now have to seriously think if I can continue working. Defo call the tax credits team as the changes take effect from 1st April (although each tine I speak to them I don't find them particularly helpful). Good luck

I didn't realise it was so much lower now - the other thing to bear in mind OP is that its your income whilst you're on maternity leave during that first year thats important. So if you plan to have 12 months off, you will have at least 3 months unpaid and then a reduced income presumably for the first 9 months whilst you're on maternity pay. If your income drops below the threshold for that first year, then you'll be entitled to something. Obviously when you start working again, you will earn more and you probably won't be entitled.