Affordability of childcare for 2+ children

[Lochie]

I've just been doing some sums to try and work out childcare costs for when I hope to return to work after birth of second child due in Feb (am hoping to go back next Summer). I am not sure if my maths is wrong but it looks like childcare costs for 2 will be 150% of my take home earnings (based on 2 x nursery places 3 days a week). I am really shocked and just wondering if I am missing something here? I earn under the national average but don't consider that I earn a tiny amount either.

Are there any childcare tax breaks for working mums of more than one child? Are there any government subsidies I don't know about? It looks like the working parent would need to earn over ?45k a year full time from my numbers to break even with childcare costs for two. That seems like total madness! How do working mums of 2+ manage?

I'd just be interested to hear if my maths is wrong of if that really is the way it is. Have you gone back to work after 2 kids and actually lost money doing so? Was it worth it?

I am at a pivotal stage in my career (half way through a qualification) and want/need to go back but can't if the maths doesn't add up which I'm totally gutted about! Any advice/experience appreciated...

[bluesuperted]

I don't know the exact maths of it but have looked into childcare/earnings ratio and for good quality childcare (expensive nursery, good childminder, nanny), I think needing ?45k earnings for two kids sounds about right, maybe even a bit higher... My rough guesstimate is you need to earn ?30k+ pro-rata for even one child...

I think lots of working mums earning less than that have family support... Or choose significantly cheaper nurseries than we have available (or would want to use...) round here...

Sorry to be the bearer of bad news... Can your husband reduce his hours at all?

[KatsuQueen]

Hi Lochie, I think you've got your sums right. You need to be earning quite a bit just to break even :'( in my case, I'm taking the "long term view" i.e. if I can just make it through these next 5 years, things will get easier when proper school, after school clubs etc kick in. Or maybe I'm just kidding myself!

I agree with bluesuperted, from speaking to other working mothers, I've found that there is often a grandparent covering one or two days a week. Which basically becomes your "profit" when you are earning money but not paying for childcare.Does make you wonder if it's worth it.

[Lochie]

thanks for that. I have previously benefited from childcare help from my mum but that will not really be on offer with 2 kids - doesn't seem right to ask a 60+ year old woman to care for two handfuls when its my own decision to have more than one child. my son has just settled into nursery and loves it so want to keep continuity there by putting both kids in same place but didn't realise the gigantic costs involved.

Just found this - UK highest childcare costs in developed world.

http://www.dailymail.co.uk/news/article-1305310/UK-families-face-highest-costs-childcare-Average-weekly-nursery-160.html

What a shame - guess i'll be looking at who I vote for very carefully in the next general election!

[Joella]

I'm afraid your maths is probably correct. I don't know whether your employer has set up the childcare voucher scheme but this exchanges part of your salary into vouchers which are exempt from NI and tax. However changes were introduced to the maximum amount you can receive in vouchers at the start of this tax year. You can find further information on lots of websites if you google childcare vouchers. You will also need to check that your nursery accepts the vouchers too. However, this doesn't give you a huge saving in the overall scheme of things.

[chantelle]

well, i do think you have to take the longer term view. The longest overlap of two in nursery can only be 4 years and more likely less, so it's only a fairly short-term expense. After school clubs or a few hours with a childminder are a lot cheaper once one and then both start school.

[bluesuperted]

It's hard to take the longer term view though when you're making a loss unless one partner earns enough to cover the shortfall; on two average salaries it'd be hard to cope with a loss of several hundred pounds a month, even over just a few years. I know we physically couldn't do it without sinking into debt very quickly.

[Fidgetsmum]

I don't know how much your nursery costs, but perhaps you could look at a nanny-share. That's what we chose as it actually worked out cheaper than the nurseries we looked at (Asquiths etc) and it meant our daughter got one to one care. Many nanny shares are costed per family too, not per child, so the addition of our son to the share in November is not actually costing us much more in total childcare costs.

[sunbob]

Or choose significantly cheaper nurseries than we have available (or would want to use...) round here...

If you can bring yourself to consider a different area (depending on accessibility/route to work) you may find a cheaper option. You can visit and make sure you're happy with the place. ED childcare is only so expensive because there is no affordable competition available close by, not because it's better than anywhere else.

[EmmaCC]

I'm also going back to work after having my second and sympathise totally with the shock at the huge cost of childcare. To me it seems unfair that the government aren't encorouging middle income mums to go back to work. It makes me think that the powers that be only want v low income mums (who can get tax credits to help with childcare) or v high earners back at work which really annoys me. Most of the really important jobs women do are what I would count as middle income earners- nurses, teachers etc...

Rant over- my children are going into nursery 3 days and then the 4th day will be covered by a mixture of my husband and grandparents (asking the grandparents who like yours are well into their 60s does make me feel slighlty guilty but once a month doesn't seem to be taking the piss too much).my mum is even travelling down from yorkshire to do her one day a month!!

I would agree with the suggestion of looking at cheaper nurseries. With my first I paid top, top money thinking the more expensive the nursery the better it was- I was v wrong and am much happier with a cheaper one based just outside east Dul - it's saving me ?40 a day woth the 2 of them in there. Also nit sure of your age gap but in jan my eldest will start getting the 15 hour government grant which at our nursery equates to 11 hours a week free all year round.

Changing nursery may not be an option for you as you ate happy with your current one but it is true that ED nurseries are taking the p*** as they know the demand is there and think everyone living here is rolling in money! It's hard financially to go back to work with 2 but personally I'm thinking long term- like you I'm at an important stage in my career- if I continue then my earnings etc should rise steadily plus, in all honesty I need to go back for my own sanity!! Good look with whatever you decide to do....

[Renata Hamvas]

Yes, childcare is very expensive. The cuts in child tax credits (which helps with childcare) and the scrapping of child benefit where a parent earns over 42k or so in (Jan 2013) are going to having a big impact on many families too. For the later, number of children and joint family income is not considered at all (and if the parent is a single parent or not), so if you have more children, the greater the hit!

Renata

[Monkey]

Unfortunately renata there is very little money left. And I don't remember labour being very supportive of working parents. Remember when Gordon brown decided to get rid of childcare vouchers?

[Fuschia]

Monkey Wrote:

-------------------------------------------------------

> Unfortunately renata there is very little money

> left.

All gone to the banks/bankers and tax cuts for the rich!

[MaeveW]

I don't know what the situation is now, but when I went back to work in April 2009, we received quite a lot of help via tax credits.

My situation sounds similar to yours - 2 children in childcare 3 days a week. We are still receiving payments and have not had cuts since new government, but obviously we were already in the system, and I don't know how it is for new applicants. It is obviously means tested on your income as a family, but I understand they can pay up to 80% of childcare costs.

Definitely worth looking into - if you do a google for tax credits you should be able to get the number. It made the difference for us in me going back to work part time or not at all, as meant there would actually be some financial benefit and I would not just be working to pay childcare. Good luck!

[bluesuperted]

MaeveW tax credits have definitely been cut - we don't get anything now and when baby was born we got more than ?80 a week! Quite a reduction (partly due to the baby specific portion being axed but not all due to this). I don't know the ins and outs of childcare vouchers but I do know the scheme is now closed to unregistered higher rate tax payers.

Too true F!

[Monkey]

Yes and a ten year spending spree during which the rich have been allowed to do what they want

[EDmummy]

Yes, think your maths is sadly correct! When I first did the maths 10 years ago (with No. 1 on way) we decided to have what I call 'the childcare gap', 4 years between No. 1 and 2 so we could afford good quality childcare for both of them. I also work part time (3 days week) for an NGO so salaries were never particularly good but our view was that even if we broke even, it was much better than trying to get back into the labour market after a long break and better career wise. I'm now in the position after 10 years to start earning a bit more money around school hours on the days I don't work but as the rest have said - it is a long haul and I don't think a lot of people have any real knowledge of the cost of having children (perhaps we are all too loved up to think about it logically).

The other thing to remember is, once you have got rid of full day childcare costs you still have to think about before/after school, holiday cover, after school activities etc., altogether, about the same cost as all day childcare!

I really hope you find a solution that works for you.

[Chippy Minton]

The thing that we found with childminders was that often, even if they were just picking up after school and then keeping junior for a few hours, they still had to charge a full day rate because they are only licensed for a certain number of children so if they took ours, it meant giving up one of their places and therefore potentially a whole day's pay from someone else.

One other thing that's going to hit next year is the loss of child benefit if either you or your partner do earn over ?42K - well over a grand a year if you have two kids.

[Smiler]

It is indeed really expensive, but when you do the maths, don't just take into account your earnings (should be the whole household income) and don't just take into account the short term. Economically, it is much better for women to continue working, even at a loss for a few years, than to take a longer career break, after which it can be hard to find work for reasonable pay and at a similar level than before. After a break it can also be harder to find part-time work. And of course no pension contributions, risks of relying on one salary etc etc.

[Smiler]

Know it's not really helpful for those in ED, but we didn't realise before leaving how much cheaper (and more available) childcare is outside London. Childcare at a good local nursery near us (Epsom) for two kids (one under two, one over two), three days a week, costs just over ?1000 per month, there're lots of childminders who have just a couple of part-time mindees, don't charge for the hours kids are at preschool or a retainer fee etc.

Obviously transport costs go up though, so it's swings and roundabouts.

[Lochie]

Thank you for all your replies.

I totally agree with the 'short term pain long term gain' opinion and if possible I will definitely take the sting for a few years to keep in the job market. I very much enjoy being a working mother and want to continue.

My mum was saying last night that when she had children women just took 5,6,7 years out of their career then went back to work afterwards when kids were at school, but it was different back then as mums were younger and would re-enter their careers in their late 20s/early 30s rather than now where mums are older and face the daunting prospect of going back to work after a break in their 40s.

Luckily we are lodging with family nearby and pay cheapish rent so can take the sting of childcare costs. However we worked out that if we want to move out locally to a 2 bed flat at ?1500 a month rent (as we were planning to do spring next year!) we'd be in debt every month with childcare costs as well. So whilst we can bear the brunt of the costs by lodging with family on cheap rent, that is not the case for all and I am sure we are not the only ones in this predicament.

Tempted to take a box of rotten eggs to lob at Cameron, Osborne et al...

[Lochie]

...and Milliband to be honest - I don't hear him piping up with any solutions!

[Smiler]

Yes, my mum says the same thing, 'twas normal to have a bigger career break, but she had kids in her early 20s, and when she re-trained higher education was free. And of course pay wasn't equal and there were no maternity rights, so they didn't have many other options!

Now, many of us have kids later, women taking time out have to face stiff competition for jobs, less flexibility and higher costs in career-changing and of course ageism and sexism. Good times!

I really hate working with tiny kids - no local family as back-up. Last night the baby was up all night as she's ill and spent most of it weeping about how the hell I'll cope in a new job with two kids when simple stuff like frequent sickness, train breakdowns, sleep-deprivation etc happen.

Would really rather not work, but have decided that the short-term pain approach is best for us. I get annoyed when women say blithely "oh it just wasn't worth-while financially to stay at work, my earnings didn't cover the childcare", as it just seems short-sighted. Have got no problem with people taking time out, but to make out that it's the obvious option and a financially sound one is disingenuous.

Oh dear, looks like you'll be stuck lodging with family then Lochie :'(

Or move to a cheaper area near ED?

Or come up with a great idea and become an entrepreneur or novelist (in your spare time) while caring for the children, as is always espoused by those godawful women's mags?

[Lochie]

Thanks Smiler. Its ok - i'm a career lottery player - my numbers will come in!

Today i'm thanking god for the simple things in life anyway like sunshine in September and good health. Got to be grateful ;-)

[bluesuperted]

Smiler - for some people it is financially unsound to take a monthly hit so that two parents can go out to work. In our case (although my primary reason for staying at home is that I want to care for my son full-time at the moment) we literally cannot afford for me to work at a loss. It would mean that rather than existing on a single (very modest) teacher's salary, we would exist on this but MINUS a childcare shortfall caused by my working - by my calculation and taking into account tube fare and (very conservative) work clothes etc costs this would mean several hundred pounds less a month. It would make a massive dent and would mean we would be in the red every month PLUS would have all the logistical difficulties associated with being a working mum - plus it's easier to budget when one person is at home to cook cheap meals etc. I think you are thinking of people on larger incomes but I know that we are not being disingenuous when we say we can't afford for me to work. Also we are taking the longterm view and I have a career I can pick up again at a later date, like everything in parenting, no decision is taken lightly and I certainly do not do anything without considering the long term as well as the short term.