Tax credits cut, now I can't afford to work

[NakedMum33and3rd]

Hello,
I started a new job at the beginning of the month. I was working two days a week and now I work four.
I accepted the job without thinking about the implications it would have on my tax credits (silly me I know). I now have checked and I am no longer entitled to anything. The only problem is I now cannot afford my childcare. I have a 1 year old and a 3 year old. I've moved around to try and find a cheaper option but still am left with nothing after paying tax and childcare. Luckily I can still cover my bills but I am going to have little money for food and basics.
We already budget our shopping and can do more but it's a horrible feeling essentially working double the time to be worse off at the end of the month. I can't quit this job because it is a massive opportunity and once my boys go to school it will pay off but right now after paying our living costs we have nothing in the bank.
Has anyone else been in this position before? Am I missing something or is this just what happens when you increase your working hours?
It just doesn't seem right to me. Yes my salary has increased (not doubled due to tax) but my childcare costs have also doubled.

When planning our family I just assumed that as we both have decent jobs it would be OK. I didn't think childcare could have been as expensive as it is.
It's more that I can't believe that the more you work the less you take home. I was better off working less and earning less.
It is frustrating but you are right I do have to think of it as a long term situation.
Au pair wouldn't work for us as we don't have a spare room.

That's a massive amount for childcare, we don't live in London or anywhere near it and for two kids in care we pay just over a quarter of the amount you do. Living in or close to London brings its own set of unique problems, expensive childcare being one, which don't affect the majority of the country.

I'm not convinced working and having nothing at the end of the month is necessarily wrong, if that's the situation you find yourself in then you need to change the situation - I don't think the fix is for the taxpayer to give more people money.

The fix might be for the taxpayer to take less from people in the first place.

I'm a taxpayer......

Would an au pair (live in or out) be cheaper than the £22k nursery fees? You'd still get the free hours for the 3 year old.

Mine have been cut. Massively.

I actually would be much better off not working.

The tax credits lady (rather rude and unhelpful!) said they weren't interested on my outgoings (high rent, large childcare costs, high council tax etc). Just said we 'should' be able to cope on our income.

Got 2 kids. Live in a 2 bed house. Not sure where they hell we're supposed to go to cut our outgoings even further. Massive catch 22.

I would reset my mortgage to interest only for next 3 years.

Or remortgage.

Or take out a loan (possibly last resort)

We remortgaged last year just because our fixed came to the end of its term so can't remortgage again but will def see if it is possible to go to interest only.

That would make a big difference.

Do au pairs live out? Don't they have a limit of the hours they can do too?

Never had an au pair, but there's lots of different versions. Might be worth asking on the childcare section or look at Au Pair World (Ithink).

I just know that there is nearly always a solution to childcare issues, you just sometimes have to be a creative and think laterally.

I understand that it's depressing working for nothing, but I'm not sure a couple with two working parents, able to afford a mortgage and bills and essentials, should qualify for or need benefits and I think that's where TCs went wrong in the first place.

My point farmhousepuddings is that we cannot afford essentials. We have been left with £100 per month to feed/provide nappies and clothe a family of four plus any other emergencies that may crop up. Before I took this job we were given enough tax credits that meant that I could feed everyone and have a little left over. Now I am panicking that something may go wrong. For example if my boiler breaks or our car gets a puncture.
Whether I can afford a mortgage or not is irrelevant. It's the fact that childcare costs are so high that it does not pay to go to work.
I would be better off if I did not work (and did not pay tax and contribute to the system). Which in my opinion is backwards.
I want to work. I love my job and I know once my children are in school things will be much easier but for now it is concerning that this is happening.
I hope I can find a solution but I posted on here seeing if anyone else found themselves in this situation and if there was something I could do that didn't involve me quitting my job just to get tax credits and cut the childcare costs which seems ridiculous.

I don't blame you for that. I'm just pointing out the stupidity of a system where you're better off working fewer hours and that benefits for a family of four where one works full time and one works part time shouldn't be needed, should they?

However I do think the panicking about broken boilers and broken down cars holds true for many of us.

You need to analyse every aspect of your outgoings, and see where you can cut back. And/ or one of you get a pt job a few eves a week, even nmw that would cover food and nappies. If you run two cars, sell one and downsize the other. And if you must sell and move to a cheaper property.

Can your husband increase his earnings?

The problem with cutting back/going interest only/reviewing utilities and so on is that that process can only really happen once. You've done all that so now you have nowhere to go except to increase earnings as rapidly as possible.

I would look at a combination of different childcare

What hours do you need childcare exactly?

I would look at a live out nanny who brings their own child with them. They will cost less than a regular nanny. Also you want 4 days not 5 so could work. If you or Dh can reduce times per day needed even by an hour it will be massive savings .

could you or Dh work one hour earlier and one hour later each day so instead of needed 8-6pm you need 9-5pm for example? So Dh worked 7am-4.30pm, and you 9.30am-6.30pm for example

You could look at an au pair. They mainly look after over 3 years and not full time (25hrs a week), but could be worth looking at for 1 year until eldest is at school. Children would have to share bedroom with you 1 year, but would mean she could have eldest after free nursery hours. So your only paying youngest nursery fees. If au pair picked 1 year old up an hour earlier from nursery also there could be savings.

Have you also looked at whether a childminder is cheaper? For us also in London it was £95 a day per child in nursery, but only £70 at a childminder. So for two that's £50 per day savings

Loads of great ideas above, one thing that might be possible will amenable employers and suitable jobs, is it possible to compress hours: so either DH does 5 days in 4 (ie 4 10 hour days instead of 5 8 hour days), or both of you compress half a day out of the schedule, so say DH doesn't work Monday mornings, and you don't work Monday afternoons to take out a day of child care? Also, would you actually working 5 days a week make you better off? The difference in 4 days/week and 5 days/week in nursery fees for us was about £50/month ( on a lower daily rate, it must be said), so if you were working FT, the increase in salary wouldn't be eaten by childcare in some nursery's.

How close to 4 is the 3 year old? Any chance they are 4 before Sept, so going to school then? Can you survive til then?

Can you take a short mortgage payment holiday to give you some spare cash?

I think if your DH could work four days then that would be a great solution. Either with losing the fifth day's pay, which would take you back into tax credits and be one fewer day in nursery, or by doing compressed hours.

If you have a spare room maybe consider getting a live in au pair short term they are much cheaper or even a Nanny who will charge one price per hour for nothing children rather than nurseries and childminders charging per child

Any chance you can negotiate 3 long days at work rather than 4? Pay less for childcare then.