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Does Work Pay?
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DerbyHillTop


Posts: 120
Joined: Aug 2008
Post: #1
11-01-2011 05:06 PM

How does anyone with more than one child of pre-school age afford to work full time?
I thought I only needed to fund the first 3 years with savings as fees would reduce once children reach 2 and 3 years of age. Well my nursery has other plans for me and fees are going up by 240 pounds per month instead of going down. Savings are gone and at a reasonable salary I canít afford this increase but equally I canít afford not to work as we need second income to cover the rest of the bills.

It seems to me that the only way for my family being better off is if I can work part time (3 hours a day or less) and contribute a lot less to the tax system. Sad

Do parents feel they have a choice of staying at home vs. going to work? Is it silly of me thinking that work pays?

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michael


Posts: 3,217
Joined: Mar 2005
Post: #2
11-01-2011 05:31 PM

Well one way is to have a partner who stays at home to look after the children. I have been fortunate enough to be in full time employment since the birth of my daughter (my wife has not).

My point is that 'anyone' probably is not the right choice of word unless everyone was a single parent. Despite this point I completely agree that nursery fees are ridiculously high and a disinsentive for mothers (usually) of young children to work full time, even with the slight benefit of childcare tax vouchers.

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Londondrz


Posts: 1,538
Joined: Apr 2006
Post: #3
11-01-2011 06:07 PM

Both my wife and I work full time, we have two kids, one in nursery and the other in school. We get by and work around friends with kids by sharing child care (I look after 2 kids on a Wednesday after school and our friend does the same two days a week). We also have school age daughter in after school club three days a week.

We cant complain because we went into parenthood with open eyes knowing the downside in terms of the work/life balance, the upside of course is having two great girls who we love.

Where there is a will, there is a way.

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roz


Posts: 1,793
Joined: Mar 2005
Post: #4
11-01-2011 06:40 PM

hi there- which nursery is this? Sounds very steep but I suspect many are finding delivery of the early years curriculum quite expensive and/or are cashing in on demand.

I just went back to 4 days per week but it was better financially for me to work 3 days as was the case of my partner who still works 3 days per week and tutors privately to make up the money. We get around £8k per annum in tax credits as our childcare is £15k pa- and thats for three kids two days a week only!

best wishes

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roz


Posts: 1,793
Joined: Mar 2005
Post: #5
11-01-2011 06:50 PM

PS I doubt if we'll get the same level of tax relief next year due to the economic situation so we are making the most of it now, but its pretty necessary in making the books balance in the first years when formula and nappies just cost a fortune. I did work out that the first years child benefit went entirely on those two items!Fortunately I meant also to say that it probably pays in the long term for people to maintain their pensions , employability, skills and work 'fitness' as being out of employment for any length of time makes it harder to get back into again, especially in this economic climate where jobs are so hard to find. Having been unemployed for 9 months until getting another job a year ago I am too aware of the difficulties . In our family our personal work patterns are therefore about sharing the care, sharing the responsibility, but also spreading the risk of both of us being out of work as if you rely on one partner to be the main breadwinner what happens if they are made redundant. In short, work doesn't pay in the short term but unless you are young enough and financially sound enough to give up work for the first few extremely expensive years ( I really hope it does get cheaper!) the imperative should be to hang on in there for as long as possible.

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DerbyHillTop


Posts: 120
Joined: Aug 2008
Post: #6
12-01-2011 09:44 AM

Thanks for all the replies. I somehow feel a bit less a failure when seeing that in order to work full time, you need some form of Ďfreeí childcare. (be it friends, partner or working compressed weeks etc)

Being ALL IN THIS TOGETHER is going to be exceptionally hard on my family. (It already is Ė all our x-mass budget went on replacing the washing machine which broke down. We thank grannies for being good Santa).

I am being made redundant and have a perfect opportunity to find a better paid job, but it seems the more money I earn the more is taken away from me. First to go is the child tax credit (even on current salary), then if I earned 5k more Iíd lose child benefit. I am working it out that I need to increase my current earnings by 17k gross just to cover loss of tax credit, child benefit and increase in childcare fees. That is somehow unrealistic, so will have to find another way. I just hope that while working reduced hours will leave us with some more money as we need second income to stay afloat.

Once again, thanks for the replies.

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brian


Posts: 2,002
Joined: Apr 2005
Post: #7
12-01-2011 12:41 PM

Surely one of HMG's stated aims is to make sure everbody/family is better of in work than on hand outs.
I agree only starting and will not be easy but if we are to compete in the world economy we must have less people who could work dependent on the state.

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DerbyHillTop


Posts: 120
Joined: Aug 2008
Post: #8
12-01-2011 02:33 PM

Dear Brian,
stated aims of policies are one thing, and the outcomes are another. I've show you that my family with 2 preschool children (3 years so far and 2 to go) can face substantial hurdles to maintain working. The last government tried to address the problems via Child Tax Credits (had its own problems too), but the new one looks at your income without regard for the astronomical childcare costs and decides you are sufficiently well off to pay all the bills yourself. Fine, then they are making me live in poverty because I can't afford to work full time and benefits only will not pay my mortgage. My family is a big looser with up and coming changes, and the only loss I've worked out so far is in connection to having small children.

Not one reply to my question had both parents working full time.
I will struggle to work out how many hours of work and at what rate will make me better off. I want to work, and I funded my desire for 3 years but I wonít be able to do it for the next 2 years even by working and earning more. How's that?

So while you may think expect me to pull our economy forward (as I am capable and of working age) I have lost personal benefit in doing so. My employee contribution to tax and NI this year will be in region of 9k. Next year I bet my earnings will be under the threshold to pay tax. Well done the chancellor! You are making me and your deficit worse off (at least on my account).

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ForestHillier


Posts: 490
Joined: Jul 2010
Post: #9
12-01-2011 03:00 PM

You can always have one parent stay at home like we did and no my salary per annum is not massive, it is £35k, so we get by with one income and have 2 children, aged 16 & 9, wife has not worked since the 1st child was born, so like someone said, where theres a will, theres a way, however I do feel sorry for you in losing your job and now struggling to make ends meet, must make your blood boil when you then hear of people who are not working, yet are coining in the lolly when their giros arrive

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brian


Posts: 2,002
Joined: Apr 2005
Post: #10
12-01-2011 03:14 PM

Derby Hill Top
Appreciate your comments. You are working so we seem to possible agree here.

A family living on state handouts , without a wage , should be worse of than a family with at least one person working.

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new2honoroak


Posts: 5
Joined: Nov 2010
Post: #11
12-01-2011 03:51 PM

My husband and I carried on working whilst both my children were in nursery. My wage barely covered the fees, but I reasoned that once they were at school then at least I'd still have a job rather than giving up work altogether. Now my son's at school we're a bit better off and once my daughter starts we'll feel like we're positively well off and might even afford a holiday abroad!! It's worth sticking with it in the long run in my opinion, as you'll value your job in a couple of years' time.

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DerbyHillTop


Posts: 120
Joined: Aug 2008
Post: #12
12-01-2011 05:14 PM

Brian,
Should a family with 2 good working wages be better off than family with one good working wage?

My problems are of temporary (5 years) financial nature. Living on state handouts most likely conceals a lot more problems than purely financial ones. That is why giving them just money/housing hasnít improved their lives. They also need positive society & better education too. I canít imagine that kind of life being easier.

New 2 HonorOak
Well done for surviving until the school age. It just feels unfair to work almost for free in order to keep your job. And this free work is for 5 years. (12.5% of full working life)

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Jane


Posts: 52
Joined: Jan 2007
Post: #13
12-01-2011 06:18 PM

Sorry if it's a bit off topic but have you considered other childcare options? I found private nurseries very expensive (state ones impossible to get a place in) so took the childminder route and was very happy with this as my children had a secure home environment rather than lots of different people looking after them and were made to feel like part of the family. They were taken to playgroups and there were usually one or two other children being cared for in the home as well. We had the same childminder for many years and, while of course not cheap - why should it be?, I think it cost less than a nursery would have. I have colleagues paying over £1000 per month per child in a nursery.
If you have space, a nanny could also be an option.
Assume you have considered these and rejected them but just thought I would mention it. Lewisham would have a list of registered childminders that you can interview.

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ForestHillier


Posts: 490
Joined: Jul 2010
Post: #14
13-01-2011 01:34 PM

£1k a month per child is incredible, things must have changed since my children were that age as nursery was free, so apologies if my earlier email offended anyone in anyway

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mljay


Posts: 80
Joined: Mar 2007
Post: #15
13-01-2011 01:35 PM

I am curious to know what the definition of 'living in poverty' is when you say they are 'making you live in poverty'?

Also to say you would be working 'almost for free' - sounds like you would just be able to cover costs if you do find employement, but will not have any spare. I am sure your employer would not think you are working for free when paying your wage.

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DerbyHillTop


Posts: 120
Joined: Aug 2008
Post: #16
13-01-2011 03:38 PM

mljay

if you need 2 salaries to maintain home you live in, and then you face childcare bill which is more than one net salary but a bit less than the other.

To supplement your income you start to use your saving (that you had accumulated while living in the same home) and then you remortgage not to buy cars or go on holidays, but to have a buffer for basic expenditure. I call that living in poverty or working for almost nothing.

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brian


Posts: 2,002
Joined: Apr 2005
Post: #17
13-01-2011 04:38 PM

Yes Living In poverty slogan has been much abused by the left. I am sure the average Haitian , Bangladeshi or Congolese would have a good chuckle.


If people working are no better of than those on handouts then handouts need to be slashed. Hopefully IDS will get round to this in due course.

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mljay


Posts: 80
Joined: Mar 2007
Post: #18
13-01-2011 04:55 PM

thanks derbyhilltop - It would not be my definition of 'living in poverty' but to each their own.

sorry to hear that you are facing tough times and the nursery bill hike does sound like a shocker. I am now 'worried' about whether my nursery is going to turn around and present me with the same.

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mljay


Posts: 80
Joined: Mar 2007
Post: #19
13-01-2011 05:20 PM

for any interested on 'living in poverty' - just tried looking up what it means when using the term in the UK(http://www.cpag.org.uk/povertyfacts/#who)

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roz


Posts: 1,793
Joined: Mar 2005
Post: #20
13-01-2011 09:27 PM

Theres no reference in this link to the impact on parents of multiples and increasingly such families are being identified as being at considerable risk of poverty and other social ills by mere fact of having to spend out a lot of money at the same time, and are prime sufferers from real time reductions in Child Benefit or Tax Credits. TAMBA has carried out some good research on this subject so I'll try and post a link sometime.

In respect of childcare fees, £1000 per month is cheap considering that most places charge £60 a day, and I've found little distinction between nurseries and childminders. At £60 a day thats around £300 per 5 day week, allow a bit of discount ie £260 per week, that averages out roughly at around £14k per annum which is more than £1000 per month. In north London it can be higher. Nannies (live out) can be £36k per annum, and although it may seem good value, they need annual holidays, can go sick, and have personal and family emergencies like the rest of us, have a bit of admin to do on their payroll, tax and NI (or you can pay an agency to do it). If a nanny is sick then you normally have to pay them something and pay for an alternative arrangement. You may need legal advice on employment law at some point. It will all add up. In our situation we found that a nanny was paid more than a teacher hence my teacher partner was the one who went part time to look after the kids whilst I returned to do longer hours. It is a real economic and personal issue for many families and there is rarely any change from the childcare fees. Like Derbyhill top and a lot of other people we have spent our savings on topping up our household deficit. Nurseries are free after 3 years old yes but only for a part time place and children still need care so most families I know still pay the childminder whilst the child goes to nursery.

You can get more subsidised nursery places ie workplace nurseries, ones linked to childrens centres, but you have to be lucky to get in.

Having lost a job before I continued to pay childcare fees for 10 months from my redundancy package whilst continuing to look for work as I had no chance of a job if I had to spend weeks faffing around trying to find childcare. There were stories of women being given two weeks to find childcare in order to take up a job or face losing benefit if they lost the job in those circumstances. If you are trying to work out whether it pays to work, you will have to decide whether you can manage on one income without signing on, but if you don't sign on, you can't accrue NI and protect your pension, if you do sign on,( which you have to do in order to claim mortgage insurance) you have to workhard still at applying for 6 or so jobs per week. You will be subject to spot check interviews and after a few months the dole office will find jobs for you to go for. In my case the jobs were in Walthamstow 9-5 which would have made it difficult to drop off and pick up my child. Fortunately I didn't get an interview.

The other thing people need to consider whilst signing on is that you have to confirm at the start that you are willing to work a full week in order to obtain benefits. You can not state that you can only work part time for childcare reasons as this is likely to disqualify you for benefits. So for many working mothers the options are either to pretend that you can work full time or not bother at all. There are no concessions and in my case, certainly no question of assistance with childcare fees nor even a trickle of interest in my circumstances. I was getting £60 a week on benefits whilst spending £60 a day on childcare.

There are probably a few people who flout the system but I have to say I have only known a few in my lifetime and I have lived in former manufacturing and industrial areas where mass unemployment was the norm and where unemployment was over 40%. There are simply not hoards of people sitting round rolling in it on giro day in most places in the UK. Most people on benefits have to work hard at staying on benefits whilst looking for work so in my experience its a full time occupation. If you live in an area with little about then more deeply ingrained issues arise and the longer one is on benefits the less chance of being appealing to the job market.

At the end of the day our choices are what is best for our sanity and for our family and whatever works. There should be no shame in deciding to give up work to look after ones family if working does not make financial sense. Financially we also seem to be working for free as one wage goes towards enabling us to work, and I don't think thats fair do's at all.

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