If you are a parent of young children, one of the main decisions you face is childcare. Especially if you either need or want to work. Childcare in the UK typically costs around £15000 a year, which can wipe out most, if not all, the money you earn from working.
But changes are currently happening to help with this, and ensure that good quality childcare is more affordable for those that need it.
In this article we take a quick look at:
At the moment all three and four-year-olds in the UK are entitled to 15 hours of government-funded childcare provision per week. This can be either in a private nursery, state-run pre-school or with a childminder.
For working parents of three and four-year-olds in England who earn between £8,670 and £100,000 per year this increases to 30 hours of free childcare per week during term time.
Some two-year-olds in England are also eligible for 15 hours per week during term time of government-funded childcare under certain circumstances, for example if the family is receiving Universal Credit.
In the 2023 Spring Budget, Chancellor Jeremy Hunt announced important changes to help with the high costs of childcare. These are being introduced throughout 2024 and into 2025.
The three main changes are:
From April, 15 hours of childcare a week during term time will be funded for two year old children of working parents. Applications opened on January 2nd, with parents being advised to register by the end of February.
All children from nine months will get 15 hours of funded childcare per week during term time.
Pre-school children of working parents – aged between 9 months and school age – will get 30 hours of funded childcare per week during term time.
As well as government-funded childcare there are other types of financial help available for parents of young children. Let’s take a look . . .
In addition to government-funded childcare, there is also a Tax-Free childcare scheme. This can be used as well as free childcare hours if you qualify for both.
Under this scheme, the government will pay 25% of the childcare costs for each of your children, up to a maximum of £2,000 per child per year (£4,000 for disabled children).
You can find out more about the Tax-Free Childcare scheme on the Gov UK website.
Families who receive Universal Credit and are not using the Tax-Free Childcare scheme can claim back up to 85% of childcare costs.
You can find out more about Universal Credit help with childcare on the Gov UK website.
Under the Care to Learn scheme, if you are a parent aged under 20 and you are at college, you can receive weekly payments of £160 (£175 in London) to pay for the cost of childcare while you are studying.
You can find out more about the Care to Learn scheme on the Gov UK website.
Even with additional funding available to help with the cost of childcare, it can be difficult to decide on the best place for your child. Fortunately, there is flexibility of choice here. For government funded childcare, it must be provided by an approved supplier, including:
The government is currently looking at various ways to ensure that there is enough childcare provision to meet demand, as it’s estimated that the new childcare funding could enable an additional 60,000 more parents of young children to enter the workforce.
It is about to start a recruitment campaign for more people to become childminders, and will be offering an incentive of £600 to do so – or £1,200 if they do this via an agency. And from April, it is also increasing the amount it pays childcare providers.
Whether this is enough to plug the likely gap in childcare remains to be seen. So if you expect to be needing childcare some time over the next few months, it could be a good idea to start making contact with potential childcare providers now, and getting on their waiting lists if applicable.
We hope that this article has provided some useful information about the status of childcare in the UK, and that you find the right solution for the needs of your family.
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