Expecting first baby - childcare costs don't add up

giger

Hi all

Hope this is the right place.

My fiancee and I are expecting our first baby in December! I am going through the bills, particularly childcare and unfortunately they mount to more than our take home pay

Neither of our families live anywhere near us so childcare seems like like the only viable option. As there is a kidi caru on our estate, it seems perfect - until you look at the costs.
We had planned for my fiancee to take 6 months maternity, then go back to work for 16 hours or 3 days a week. I have worked out that I can cover all of the current household bills with my wage (with no money left over), but my fiancees new wage would not cover child care costs, let alone the additional baby costs on top.

We have called up about WTC & CTC and it seems we will only be paid £17.80 a week CTC based upon projected incomes at the time. With child benefit this won't even pay for one day at a nursery!

I am gobsmacked that having a fairly decent job with a good salary I cannot afford to have a baby

Have I missed something here? Any advice greatly appreciated

mitchaa

Nope welcome to the real world.

If you didn't have such a decent job, the government will have paid 80% of the costs for you. (Where's the incentive to work hard i hear you ask )

Thats the price you have to pay for working your way up the salary scale im afraid.

It makes my blood boil too, im just about to put the little 1 into nursery, and have to pay 100% of the costs:mad:

There is a salary sacrafice scheme you can opt into though which will save you tax and NI, so for example, if you earn £33k, you can salary sacrafice £3k in exchange of childcare vouchers and then be tax assessed on £30k not the £33k. (This will save you about £75pm, so better than a kick in the teeth) This is per parent, so max savings can be around £150pm.

i.e £600 worth of vouchers costing you as a couple £450 in real money.

(If your joint income is more than £22k, but less than £50k you should receive £545 family CTC and £545 baby CTC (£1090/52 = £20.96pw) You lose the baby element when child is 1 but you get to keep the £545 family element.

geri1965_2

It makes you wonder how people managed in the old days, before there were nurseries and childcare vouchers.

maemaesmummy

Yes its scary isnt it?

We thought the same when I had my DD but soon realised returing to work wasnt a viable option for me.. unless I did nights or weekends then DH could take over the childcare...

In the end I stayed at home.... we started DD in nursery 1 day a week at 2 for the interaction (this cost us £100 pm approx) and then at age 3 they get subsidised by the government.

All in all what incentive is there to work hard....

giger

If it is correct it is absurd :mad:

We had already planned to buy childcare vouchers through work to negate some of the cost, but it still leaves us short.

I am not a high tax payer (some way off) but even so you would like to think you can raise a child yourself. It is ridiculous that tax credits are capped and do not take into account individual circumstances, and also they presumably take no account of geographical areas. I already budget to the max so have no real way or reducing my outgoings

Effectively, those on a lower income that me are actually better as their child care is being paid for - how is that fair?!

Unfortunately I had planned for my future and my family, this has now come back to bite me.

Are there any other avenues I can go down for assistance?

timnicebutdim_2

Having looked into this recently i was under the impression that there is a 'child care element' of WTC in addition to CTC. So if your partner is working 16+hours and has high childcare costs, the working tax credits will increase to help cover these costs. Please correct me if i'm wrong as this is something i'm interested in.

The entitledto website is a good place to plug the figures in.

mitchaa

timnicebutdim wrote: »

Having looked into this recently i was under the impression that there is a 'child care element' of WTC in addition to CTC. So if your partner is working 16+hours and has high childcare costs, the working tax credits will increase to help cover these costs. Please correct me if i'm wrong as this is something i'm interested in.

The entitledto website is a good place to plug the figures in.

Yes there is, but if your income is too high you're not entitled. The level is something stupidly low like £25k joint earnings:mad:

It should at least be £50k (2x average wage)

mitchaa

I had a few quotes the other day and the nursery we like costs £42pd or £190pw full time.

£190pw x 48 = £9120 /12 = £760pm.

Some people dont even earn £760pm, so the parent going back to work needs a fairly good salary to even make it worthwhile.

zzzLazyDaisy

Have you done the sums based on your OH not working and staying home to look after the baby? You might find that on your income alone, your CTC/WTC will increase and you may be better off over-all?

flea72

unless your fiancee is earning less than minimum wage, then you can afford to pay for childcare out of her wages. ok, there might not be much left over afterwards, but somethings better than nothing

for best value in childcare, a whole day works out cheaper per hour, than part-time, so in your partners case, working 3 full days, means overall she should be paying out less for childcare than if she paid for 16 individual hours. also when paying for a whole day your travelling time is covered, add on the extra for part-time days, and youre paying for wasted time.

have you looked at childminders? in the scheme of things, their hourly rate tends to be less than nurserys - ie in my area you pay £40+ a day for a nursery, whereas a childminder tends to charge £3/hr so a day tends to be nearer the £30 mark

on the other side, if you think childcare is expensive in relation to your partners income, then why doesnt she think about becoming a childminder. that way she gets to stay at home with baby, but still have an income of sorts, depending on how many children shes prepared to look after

hth Flea

flea72

mitchaa wrote: »

I had a few quotes the other day and the nursery we like costs £42pd or £190pw full time.

£190pw x 48 = £9120 /12 = £760pm.

Some people dont even earn £760pm, so the parent going back to work needs a fairly good salary to even make it worthwhile.

why work it out with those figures, when your partner is only planning on working 3 days? - theres no point in paying for a week, when you dont need it!

also, most nurserys dont give payment holidays, so you will in the main be paying 52 weeks a year. some reasoable ones though, will give you 2wks max

Flea