Couple earning $275K a year couldn’t afford a second child, quit their jobs and started a business so other parents could save nearly $15K a year

A UK couple earning a combined $274,700 (£205,000) a year feared they could not afford a second child after childcare costs and mortgage repayments left them with “literally nothing” at the end of each month. They eventually quit their jobs, then studied “various benefit and tax systems,” and launched a business so that other families could dodge the country's costly childcare system.

Nicole Griffiths, 36, and her husband Matthew, 37, from Brighton, both held top positions in tech startups. The six-figure earners who were already paying £1,600/month for their eldest daughter’s nursery before deciding to go for a second baby estimated that the childcare cost would be around £40,000 a year, according to the UK-based publication SWNS.

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Mortgage payment added the burden

The financial pressure came on top of ballooning mortgage payments, which increased to £3,300 from £2,100 in 2022. With that, there were £3,000 in additional monthly expenses, “equivalent of needing to earn £70,000 before tax to cover the costs,” the outlet says.

“It’s like private school fees. That was not what I planned for at all to send a one-year-old to childcare,” Matthew told SWNS.

Earning more did not solve their childcare problem

Matthew, who expended three months applying for a senior role for a better income, was earning £125,000 a year as chief product officer at an insurance technology company, while Nicole was funneling £80,000 as a senior management role in technology services and operations.

“I was basically out of action for like three months just trying to out earn it but I just couldn’t,” he told SWNS.

Nicole became a mom for the second time

The couple's second pregnancy made them struggle. “We obviously knew that we wanted to have another child, and so we were thrilled when we found out,” Matthew said. “Until the penny dropped that now it was going to be a few quid short of 40,000 pounds a year in childcare fees for two of them and I was like wow this is now getting completely out of control.”

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The problem is because of UK's childcare support rules for high earners. As explained by SWNS, “Parents lose entitlement to tax-free childcare worth £2,000 a year per child as soon as one parent earns over £100,000.”

Parents in this income bracket only qualify for 15 hours of funded childcare a week for children aged three and above, rather than the full 30 hours available to eligible working parents over nine months.

They themselves saved £21,495

The couple then started to research tax rules, pension contributions, and childcare support to find a way to reduce their adjusted net income and recover benefits.

This way, the duo reclaimed £16,281 in childcare support for both daughters and saved a total of £21,495, according to SWNS. With that, they realized that other families might be in dire need of help sailing through the complicated route, so they decided to go for an “entrepreneur route”.

Families can save nearly $15K a year from ‘Wealthy Parent Guide’

Finally, both of them quit their jobs and launched “Wealthy Parent Guide,” which can help high earners, in terms of cracking “the code to saving on childcare,” as per its website.

“The expertise didn’t really exist under one roof and so it was really making it difficult for parents to actually see the problem,” Nicole told SWNS. Matthew said the average parent who uses their service saves £919 a month, or £11,028 ($14,785) a year.

As per Nicole, the system can have a negative effect on women's careers, as families may decide that the lower-earning parent should reduce their working hours or step back from a senior role. “Statistically, that’s probably more likely the mum,” she told SWNS. “That is often where the mother’s career does pay the price for the way that the system is set up.”

Matthew said some parents even turn down promotions or bonuses because the additional income could affect their childcare support. “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,” he told SWNS.