THE government is set to slash the cost of childcare to help hard-pressed parents struggling in the cost of living crisis.
New plans set to be announced this week could see families save £40 a week – or £480 a year.
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Childcare rules will be loosened in an effort to reduce the cost of caring for kids which can add up to thousands of pounds a year.
Some parents report that nursery fees can cost more than their monthly mortgage payments.
And women are being forced to re-think their careers, reduce hours, or even leave the workforce altogether because they cannot afford rising bills.
A part-time, 25-hour nursery place for under twos costs £7,160 a year, on average, according to a 2021 Coram Family and Childcare survey.
The government plans to increase the number of children each member of staff can look after at nurseries, The Times reports.
Currently there is one carer per four children and that could be increased to five.
And childminders will be allowed to care for kids in locations other than their homes, like community halls.
The measures are not expected to put cash directly into parents pockets, like with other schemes like tax-free childcare.
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But they could reduce the cost of childcare overall if providers adopt the changes.
The government estimates it could save £40 a month. That’s based on a family paying £265 a week for a child under the age of two.
Prime Minister Boris Johnson first hinted a childcare costs shake-up was on its way in April, as families were hit by a raft of bill rises.
The PM today told Sun on Sunday readers about its £37billion package of support to help hard-up households struggling through the cost of living crisis.
He said: “It includes a council tax rebate, a cut in fuel duty, at least £400 for every household to help with energy bills and at least £1,200 for the eight million most vulnerable households.
“We’re delivering the biggest ever increase in the National Living Wage, worth an extra £1,000 a year for those working full-time.
“And we’re helping another million families keep around £1,000 extra a year by cutting the Universal Credit taper rate.”
Around 30million workers will this week see more in their pay packets when a change to taxes comes in.
From Wednesday (July 6) the National Insurance threshold will rise from £9,880 to £12,570.
Help with childcare costs
There are a range of tax breaks and grants to help make childcare more affordable.
You can usually use them for care like registered childminders, nannies, playschemes, nurseries and holiday clubs.
It’s worth checking the government’s handy childcare costs calculator to find out which scheme will save you the most money, as not all of them can be used at the same time.
Tax-free childcare
You can get up to £500 every three months – up to a maximum of £2,000 a year – for each of your children to help with the costs of childcare.
If your child is disabled, it’s even more – £1,000 every three months, up to £4,000 per year.
To receive the tax-free benefit you need to create an online childcare account.
For every £8 you pay into this account, the government will add £2 which you can use to pay your approved provider.
You should bear in mind that you can’t claim tax-free childcare if you receive working tax credit, child tax credit, Universal Credit or childcare vouchers.
Your tax credits will stop immediately if you successfully apply for tax-free childcare. You will also have to cancel your Universal Credit and childcare vouchers.
Use the government’s calculator tool to work out which option will work best for you.
Universal Credit childcare costs
If you claim Universal Credit, you might be able to get a refund on most of your child care costs.
You can claim back 85% of childcare costs up to £646 for one child or £1108 for two or more up to August 31 following the child’s 16th birthday.
You will have to pay your childcare costs yourself up front and then claim the money back through Universal Credit – here’s the government’s guide on how to do that.
15 or 30 hours free childcare
All three to four year old children in England are entitled to 15 hours of free childcare – amounting to 570 hours per year – from the term after their 3rd birthday.
The free allowance is usually taken as 15 hours per week for 38 weeks of the year, but it is possible to take it at a time that suits you.
For example, you could take fewer hours over more weeks.
The free early education and childcare must be with an approved childcare provider and stops when your child starts school.
Parents are expected to cover extra costs like meals, nappies or trips.
Working parents may be eligible to get up to 30 hours free childcare if they are working at least 16 hours a week on average and earning the National Minimum Wage or more.
Check out what you could get and apply online at gov.uk.
Free childcare for 2 year olds
Parents living in England and claiming certain benefits can access free childcare for their two-year-olds, including:
- Income Support
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Universal Credit, and your household income is £15,400 a year or less after tax, not including benefit payments
- tax credits, and your household income is £16,190 a year or less before tax
- the guaranteed element of Pension Credit
- the Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit)
However, you may still have to cover extra costs like meals, nappies or trips.
