We have seen a lot of conversations on Mush ups about advice around childcare, so we teamed up with experts to give you an overview of the UK’s childcare funding landscape! We hope it’s useful..!
Choosing the right childcare in the UK can be tricky. We have a whole guide about it! Families can find themselves balancing a number of priorities around quality, location, and opening times (to name just a few). These can quickly be trumped, however, by the cost considerations. With the average part time nursery place for under twos now costing £6,300 per year (more than double what families spend on food and drink) lots of parents need help to get the childcare they want at a price they can afford.
The good news is that almost all families are eligible for support from Government with their childcare costs, and a range of offers are available. The bad news is that it can be pretty confusing to find out what is going to be best for your family. This guide should help you to find your way round the childcare maze and you can use the Government’s Childcare Calculator to work out which is the best option for you.
Tax Free Childcare
With Tax Free Childcare, for every £8 parents spend on childcare, the Government will add another £2, up to a maximum of £2,000 per year, or £4,000 for those who are disabled. This effectively gives parents basic-rate tax back on what they spend.
This offer can be used for all children up to the age of 11, or 16 if they are disabled. To be eligible, parents each needs to be working, and earn less than £100,000 per year.
If your employer offers childcare vouchers, you can use these to pay for childcare from your pre-tax salary, meaning you make similar savings as under Tax Free Childcare. This scheme can be used for children up to the age of 15, or 16 if they are disabled.
The Childcare Voucher scheme is gradually being phased out, but will remain open to new applicants until October 2018. You cannot use childcare vouchers at the same time as Tax Free Childcare.
Support through the benefits system
Families with average or lower incomes are likely to be able to get support with their childcare costs through Universal Credit or Working Tax Credit. This can be pretty complicated as how much you get depends on your earnings and childcare cost. A lot of families will find that this offers more generous support than Childcare Vouchers or Tax Free Childcare, particularly if you earn less, as it can pay for up to 85 per cent of your childcare costs.
15 hours free childcare
It may seem a long way away at the moment for some of you, but you can get free childcare once your child turns three. In England, all three and four year olds can get 15 hours of free childcare per week during term time. Some two year olds will also be able to get free childcare if parents receive certain benefits or if the child is disabled.
30 hours free childcare
3 and 4 year old children of working parents are entitled to an additional 15 hours of free childcare, bringing their total to 30 hours per week during term time. Children may still be able to get 30 hours of free childcare if one of their parents is working, but the other is off work on parental leave, sick leave, or because they are a carer.
Free childcare offers are also available in Scotland, Wales and Northern Ireland, though the eligibility criteria and number of hours available differ from country to country.
It is complicated, but there is good information out there. At Family and Childcare Trust, we provide more information on the support that’s out there and what is available in your local area for families. You can find out more, check your eligibility, and apply for all of the offers listed in this guide by visiting the Government’s Childcare Choices website.