Expecting first baby - childcare costs don't add up

giger

Well thanks for all your comments guys, it seems this a popular and sore topic!

Happy to post exact figures it it will help, but I have discussed this over the phone with the people who deal with WTC and CTC.

Our joint income means we are not entitled to WTC, and my partners full time wage falls short or nursery fees (£40.50 per day). My other half could give up work but there are 2 probs with this:

1/ having no family nearby to support us and for other reasons means she may not cope very well on her own
2/ Whilst I can cover all current household bills out of my wage, I cannot cover the additional bills involved with the baby.

I will run another quote through with her not working, but as she will be alone for most of the day I really would not like to do this. Also, I have been told that because we have savings (shock, horror!) even with her giving up work we are not entitled to WTC and the savings must be spent first

There is something not right with this country!

mitchaa

giger wrote: »

There is something not right with this country!

I take it the labour box will not be getting ticked by yourself or your wife come next general election then;)

Yes i agree, benefits system is a complete shambles. Imbeciles in charge of the running of this country.

giger

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:

There are currently advantages, we own our home. Something we couldn't afford to do when in the area where my family are. I have a car and I have some spare cash each month which I have been saving for the future. i.e if I lose my job, or if we have a family. But now it seems it was pointless!

Like many, I couldn't take a lower paid job due to mortgage commitments and other reasons.

giger

Can anyone confirm what the cut off point is to receive better WTC (or CTC) entitements?

My other half is a low earner but loves her job, with my salary is averages out that we are both on the average wage (or very slightly more).

I've been so worried about costs I haven't even had chance to post in a parents to be thread yet!

galvanizersbaby

flea72 wrote: »

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

This is the exact reason why I have never used a childminder - I find it really off putting to think of my child being looked after by someone who's main reason for childminding is so they can stay at home with their own children and take as many in as they can - might get slated for saying that as I realise not all are like that
I've always used a nursery (nearly coming to the end of that now as youngest daughter starts school in Sept) and despite all the drawbacks (cost, inflexibility etc...) it has been well worth the peace of mind
Sorry realise this sounds like a random anti childminder rant - just read that and it reminds me!

mitchaa

giger wrote: »

Can anyone confirm what the cut off point is to receive better WTC (or CTC) entitements?

My other half is a low earner but loves her job, with my salary is averages out that we are both on the average wage (or very slightly more).

I've been so worried about costs I haven't even had chance to post in a parents to be thread yet!

Average wage = £25k.

WTC has a threshold of around £15500
CTC has a threshold of around £22500 (This is where you are only entitled to the basic £545pa)

If there are 2 of you working then its near enough a certainty that you will pass both these thresholds.

giger

Seems like no help is available to me then. I'm not quite sure what I am supposed to do in this situation. If the money isn't there, it isn't there

BARGAINHUNTER!

The only option seems for your wife to stay at home to look after the baby if it is not financially viable for her to work and pay childcare. I used to have two children in full time childcare while I worked full time - it was tough, and to be honest I probably didn't bring home anything after i had paid for childcare, travel to work, clothes for work etc. But I did it, as I felt that it was better for me to be in employment as 5 years out would have long term implications on my future earnings and pension. In all, I only had to pay 2 lots of full time childcare for 3 years, and then when my eldest went to school I went part time so I was then only paying 1 lot of part time childcare. when they were both at school it felt like I had won the lottery!! But it didn't last long, as children are very expensive! Its always money for this money for that!! And holiday childcare when the kids are on holiday from school is a nightmare too!

Please be aware that if you wife does not go back to work she may have to pay some of her maternity money back. Is there an option for your wife to find a job that offers subsidised childcare or to maybe work somewhere like Tesco in the evenings when you are back from work? If I had my time again I would be working nights somewhere like Tesco a couple of days a week to solve the childcare problem.

bestpud

mitchaa wrote: »

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.

Many low income couples earn nowhere near £20k, or the £25k you say virtually every couple will earn above in another post! My oh works full time and I work part time - our joint income is between £16 and £17k. And incidentally, we both earn above the national minimum wage!! We don't use childcare and have not had it subsidised through tax credits either but I guess there are may in our position who rely heavily on that money. Also, vouchers are less available in low income jobs.

I guess you are suggesting the higher earners are given child care money as well as lower earners, as opposed to saying lower earners are in a cushier position? I hope that is what you mean anyway?

Because when you look at it longer term, people like giger will have their home and will feel the full benefits or their higher income when they no longer pay nursery fees? The person on the lower income will be more likely living in rented accomodation and will still be on a much lower wage.

It could perhaps be argued the lower income families need to keep working when they have children because their chances of building a pension are vastly limited in comparison to the higher earners?

Quite simply, for high earners, it is a few years of hardship, yet for low earners it is the norm. The tax payer is ensuring a reasonable standard of living and possibly future pensions for the low income family. For the high earners it would be subsidising their high living costs, including house and car!

What I am trying to say is, while there perhaps needs to be more of a sliding scale, there are many advantages to earning a higher salary. And tbh, if there isn't, then you all have the option of selling your homes, buying an old banger and earning the minimum wage for a few years!

It's easy to say all is rosy on the other side but it simply is not. The extra help makes up for a vast difference in income and please do not make the mistake of thinking hard work is the only factor determining higher wages - it is not!

Giger - they are not babies for long believe me! This time will pass very quickly, even if it seem never ending at the moment.

giger

I also have flexible working at my place (office environment) and currently have every 2nd Friday off. Looks like i'll be finding out just how flexible it is - midnight til 8?!