Expecting first baby - childcare costs don't add up

mitchaa

flea72 wrote: »

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

National minimum wage = £5.52

£5.52 x 37.5 x 52 = £10,764pa

£10,764pa = £759.56pm

A full weeks childcare costs are exactly £760pm, so a shortfall of £0.44p

This doesn't include the cost of travelling to work, lunches, parking charges etc.

So your quote above is wrong, you would need to be earning a considerable amount more than minimum wage.

mitchaa

flea72 wrote: »

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

My quotes were based on 1 weeks nursery care.

A few of the nurseries around here give 2 wks off at xmas/New year and all public holidays, the quotes ive had so far are for 2 x48wks, 2x 49.2wks and 3 that have blanket policies of 51wks.

I have been playing around with figures to see how much 3/4 and 5 days will cost us. Grandparents have offered to help out with 2 days if we want. We have not yet decided on what we're going to do. (Grandparents would be a 60 mile round trip)

The quotes i got were..

£504pm for 3 days
£672pm for 4 days
£760pm for 5 days

My wife is going back to work FT but still undecided as of yet due to travelling costs to grandparents etc what to opt for.

The childcare voucher scheme will help a bit and above figures dont take this into account

mrcow

giger wrote: »

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

This more than negates some of the cost - if you are in the 22% tax bracket, you save around 40% with the vouchers! as you save on tax and NI. Once your baby turns 3, you will also have 5 x 3hr sessions paid for as well (or is it 5 x 2.5 hrs p/w?)

Why don't you post your figures down here for us to see - as a wage should generally cover child care (unless your fiance is working a very low paid job).

mitchaa

mrcow wrote: »

This more than negates some of the cost - if you are in the 22% tax bracket, you save around 40% with the vouchers! as you save on tax and NI. Once your baby turns 3, you will also have 5 x 3hr sessions paid for as well.

Why don't you post your figures down here for us to see - as a wage should generally cover child care (unless your fiance is working a very low paid job).

Max child voucher salary sacrafice allowed = £243pm per parent (£2916pa)

On basic 20% tax bracket regardless of what you earn in this category, this costs you £167.67 out of your wage. But you get £243 worth of vouchers so a saving of £75.33pm. Do this with the 2nd parent and maximum savings are £150.66pm

So £5832 worth of vouchers cost £4024 in real money, a saving of £1808pa

£5832 worth of vouchers will allow monthly childcare costs of £486pm

£4024/£5832 =69%, a saving of 31%

mrcow

mitchaa wrote: »

So £5832 worth of vouchers cost £4024 in real money, a saving of £1808pa

£5832 worth of vouchers will allow monthly childcare costs of £486pm

Which for many nurseries will more than cover costs for say 3 days per week. The nursery costs you are quoting are very high. Lots of nruseries are around £30 ish per day and are more than adequate. The quote you have been given for £42 per day is very high compared to what is around in my area (Kent). Perhaps shopping around would pay off?

Is your wife on minimum wage?

mitchaa

mrcow wrote: »

Which for many nurseries will more than cover costs for say 3 days per week. The nursery costs you are quoting are very high. Lots of nruseries are around £30 ish per day and are more than adequate. The quote you have been given for £42 per day is very high compared to what is around in my area (Kent). Perhaps shopping around would pay off?

Is your wife on minimum wage?

Live in Aberdeen hence the high costs, cheapest we have found is actually £36pd but this was based over the 51 wks. It would still work out cheaper but nursery isn't as nice. The £42pd is the highest we have found but it has come with good reccomendations from others and is over the 48wks. Also works out at £38pd if full time (£38x5=£190)

No, it will be beneficial for us for my wife to go back to work as she's on a fairly decent wage of about £1500pm

Flea 72.....We would rather put child into a nursery rather than a childminder, much much safer, everything is on CCTV in nursery, not the same in someones home where they can possibly abuse/neglect a child and you would be non the wiser.

mrcow

Okay, well if that is the nursery that you really like, then you need to go with what you are comfortable with.

I know it's hard.....I had a £40k hard working career in the city when I got pregnant with my first and gave it up to be a full time mum (and then got a local part time job earning peanuts) partly down to costs, but also because I would neve have seen my son. (Not trying to give you my life story lol!). The restructuring of our finances that needed to take place to drop this wage was massive and I really had to reeducate myself with regards to my spending and the way that we budgeted for things.

It's all a balance. Your wife earns more than £28 per day (which is what you costed the nursery costs to be using the voucher scheme) so it's a question of working out the optimum days of work to do her job well weighed up against costs and also the maximum number of days you feel comfortable with nursery care. Childcare costs are going to cost you a big chunk no matter what way you look at it, but you can make it work.

The advantage these days is that a lot of nurseries and employers offer flexibity with hours etc. Getting family to help out can obviously save a small fortune too, and if it's only for say one day a week, then it allows Grandparent bonding time without it being too much for them.

RoxieW

Ah yes - we've just been through all this.
Imagine having 2 children to pay nursery fees for! I'm a SAHM at minute as when I was working full time my (very decent!) wage was swallowed by childcare costs of £1400 a month and travel costs of £400 a month. The nursery would also charge us for every day including the days they were closed ie xmas day! The final straw came when we went on a 3 week holiday - part of which I had to take unpaid - and had to hand over £1000 despite our children not being there.
I really enjoyed my job and that was the only reason i was working - it wasn't for financial reasons thats for sure! But in the end I had little choice but to give it up. I recently looked at a local job with less hours but worked out we'd still be only £50 up. Whats the point? The government wants mothers to go back to work and continue contributing to the 'system' but if you're a 2 parent family then there's no incentive as you're little or no better off. The reality is that unless you're a single parent or on a very low wage then you're on your own.

bestpud

giger wrote: »

If it is correct it is absurd :mad:

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?

I'm assuming there are still advantages to being in your position?

Otherwise, why not just take a lower paid job and benefit from the help with childcare? :rolleyes:

mitchaa

bestpud wrote: »

I'm assuming there are still advantages to being in your position?

Otherwise, why not just take a lower paid job and benefit from the help with childcare? :rolleyes:

Lets take my £760pm example...

Assuming both sets of parents employers have the voucher scheme in place, the actual cost to the parents is around £610pm. (If both basic rate tax payers)

A low income family will receive 80% of these costs in tax credits so £608 out of the £760 leaving them with £152pm to fork out themselves.

That is a difference of £458pm better off the low income family are over the couple who do not get help. (£610-£152)

That is a massive difference especially if you are on or near the threshold.

£20k income =£1290+£458 tax credit help = £1748
£28k income = £1750, no tax credit help

Or you can work it out the other way £1750-£610 costs = £1140, £1290-£152 costs = £1138

So a couple earning £20k and a couple earning £28k will live exactly the same. Where's the incentive? You could cut your hours significantly to earn the £20k and still have the same disposable income as you were before earning £28k.

What happens to the poor sods in the middle who miss the cut off point, they will be worse off

Its not a fair system in my opinion. If the government should pay 80% costs for 1, they should subsidise 80% costs for everyone. That way, it would get more stay at home parents back into work.