Nicole Griffiths, 36, and her husband Matthew, 37, earned a combined £205,000 a year, yet after welcoming their second child they struggled to cover childcare costs. Once a parent earns more than £100,000, they no longer qualify for tax-free childcare, worth £2,000 per year, and children over three only receive 15 hours of free childcare per week instead of the standard 30 hours for working parents earning below that threshold.
Rising costs and mortgage pressure
The couple had been paying £1,600 per month for their first daughter's nursery. When they learned they were expecting a second child in 2022, they felt panic at the costs. Matt said: 'We obviously knew we wanted to have another child, and so we were thrilled when we found out. Until the penny dropped that now it was going to be a few quid short of £40,000 a year in childcare fees for two of them, and I was like, wow, this is now getting completely out of control.'
At the same time, mortgage payments on their three-bedroom home in Brighton rose from £2,100 to £3,300. Nicole earned £80,000 in senior management for a tech company, while Matt earned £125,000 as chief product officer at an insurance tech firm. They also earned extra money through dividends from three Airbnb properties.
Struggling to find a solution
Preparing for their second child, they faced an extra £3,000 in monthly outgoings, leaving them living paycheck to paycheck with 'literally nothing left' by the end of the month. Matt said: 'It's like private school fees. That was not what I planned for at all to send a one-year-old to childcare. We struggled to think of how we could afford a second child.'
Matt spent months applying for two senior jobs, each involving nine stages of interviews, but realised increasing their earnings wasn't the only answer. He reflected: 'Because every pound you earn in that income tax bracket you basically take home half of, it's really hard to outearn the problem because you're paying so much in tax.'
Finding a workaround
The couple consulted friends, accountants, and government services, but found the 'expertise didn't really exist under one roof.' In the UK, childcare costs for a child under two range from £188.75 to £325.12 per week. They managed to save £21,495 on childcare costs by making overpayments on their workplace pensions, reclaiming £16,281 in childcare support for both daughters. Eligibility for childcare credits is based on net income, not gross salary, and pension payments are deducted from an employee's payslip.
After identifying this workaround, the couple turned their research into a business, quitting their jobs to launch The Wealthy Parent Guide, which helps six-figure earners save on childcare costs. Matt said: 'The average parent that comes to us saves £919 per month on their childcare costs.'
Nicole noted that women are encouraged into senior positions, but the childcare system can 'financially incentivise them to step back.' She said: 'The higher earner in the household may trigger the loss of the childcare support, but I think it's very often that if you've got one parent earning over £100,000, the lower earner may consider stepping back. Statistically, that's probably more likely the mum. That is often where the mother's career does pay the price for the way that the system is set up.'
Matt added: 'If people in the prime of their careers are going, you know what, I don't want a bonus. I don't want a promotion because it just screws up my childcare costs. It's not worth it. We need to get people incentivised to go out and work. But this whole system for the brightest and most ambitious minds in the prime of their careers is having the opposite effect.'
