The cost of childcare is often a deal breaker for parents wanting to return to work. Parents for years have been weighing up the costs of childcare versus what they earn. Sometimes it’s just not worth it, so many mums in particular stay at home until the youngest child is at school.
I have always returned to full time employed work after my babies were born and from 2008 to 2015 I have always paid a lot for childcare. At my most expensive time, I was paying £1200 per month with Jack as a baby, and before and after school care for Dylan and Josh.
I remember when I was looking for a job when Josh was 6 months old, the job I found had to pay at least 50k to make it feasible to afford to pay the bills as well as the childcare.
I used a nursery for 6 months when Dylan my first child was little. This was a rather expensive and inflexible so we swapped over to a childminder and have been with the same person for 8 years now.
We are more than happy with our children in this childminder setting. The costs are lower with much more flexibility and it feels like a more caring environment. The childminder option also gives the option of before and after school car with drops off and pickups.
The government is introducing two new schemes this year that should make childcare more affordable so I want to share the facts with you and my thoughts.
Tax-Free Childcare. Pay £8 get a £2 bonus
Two million working families will be eligible for Tax-Free Childcare. Go to this link to pre-register for updates as to when you can join the plus there is a handy calculator that will tell you what you are entitled to. It will be gradually rolled out, with parents of children under two invited to enter the scheme first.
By the end of the year, all eligible parents will be able to receive government top-ups of £2 for every £8 that a parent pays into their Tax-Free Childcare account. This will be open to all working parents across the UK with children under 12, or under 17 if disabled.
The government will contribute up to £2000 per year per child. This can be used to pay for childcare at any provider if they register with the government service. To be eligible you both must be earning at least £120 per week and less than £100k per year.
This feels simpler than the previous childcare vouchers scheme where money was taken from your pre-tax earnings and you have more control over what you pay into the scheme for a top up.
You could overpay for a few months and build up the balance that might pay for the more expensive childcare needed during the school holidays. I will be signing up and paying money in to get a 20% top up on my childcare costs. I don’t get any relief at all on my childcare bills so this is gratefully received.
Free 30 hours’ childcare for 3 and 4-year-olds.
At the moment, we all get 15 hours’ free childcare at participant childcare providers from the term after they turn 3. This is being increased to 30 hours. From the high-level information that the politicians are talking about it feels like a win for working parents.
The scheme will again be administered through the same childcare website from the government.
This scheme comes into force just as my youngest starts school so I will miss out on the offering but I’m not convinced it will be that widely available.
My youngest goes to Pre-school that is at capacity for children numbers with a waiting list of two years. How is a setting like this going to increase the childcare from 15 hours to 30 hours when they are already at capacity, child and staff wise? I would assume that many popular pre-schools will be in this situation as well.
There is talk of combining childcare settings with the 30 hours being split between maybe a preschool and a childminder? Childminders are going to have to evolve to start accepting this form of payment for childcare.
This 30 hours of childcare is also just for the term time so there are another 14 weeks of school holidays where childcare costs will be payable if parents can’t arrange cover or take holiday themselves.
It feels like a great headline idea, but in practice, I will be interested to see how it plays out in reality. I joined a discussion panel on Share Radio today to discuss the schemes, take a listen here
Here are the summary facts
|Who is eligible?||Tax-Free Childcare||30 hours’ free childcare|
|Child age||Under 12|
Under 17 for disabled children
|3 and 4-year-olds|
|Income||Parents need to be working – each parent needs earn £120 a week and less than £100,000 per annum.|
|Employment||Available regardless of parent’s employer, and also available if self-employed.|
|Can it be used with other childcare offers?||Not in addition to Employer-Supported Childcare, tax credits or Universal Credit||Yes, can be used with other Government support such as Employer-Supported Childcare, tax credits or Universal Credit|
Do you think these changes are going to save you any money?