Childcare costs in the UK can be expensive — the average cost to send a child under two years old to the nursery for about 25 hours per week is £7,160. Thankfully, there are ways to get financial support to help lower your cost of using childcare services.
What Are Childcare Vouchers?
People often worry about the cost of sending a child to childcare. It becomes even more expensive when they have more children and live in more expensive cities such as London.
That’s where childcare vouchers come in. It’s a government’s way of helping employed parents pay for their childcare costs.
Most of the employers in the UK offer this benefit to their employees who are parents. Parents can exchange part of their gross salary for childcare vouchers, and it’s exempt from national insurance and taxes.
Employed parents with a child under 15 years old are eligible to take advantage of childcare vouchers offered by their employers.
Childcare providers, including childminders, nannies, and after-school clubs, are required to accept these vouchers.
How You Can Join
To claim childcare vouchers, contact your HR department and ask for the guidelines on how to join. Unfortunately, those who are self-employed are not eligible to claim these vouchers.
You can save tons of money on childcare vouchers as they are tax-free. In addition, both parents are also eligible to get the vouchers, which means more savings for you.
Those eligible to claim childcare vouchers can save about £243 a month or about £55 a week. You save double the amount if both parents decide to join this government-run program.
Keep in mind that the amount is not per child; £243 is the maximum amount you can save. You are not entitled to more, albeit you have more than one child.
You can save a maximum of £933 if you’re a basic tax ratepayer and about £623 for higher rate taxpayers.
Childcare vouchers also have expiry dates, so ensure that you use them within the validity period.
Note: In April 2018, the government changed the childcare voucher scheme. Those who joined before October 4th, 2018, can still receive childcare vouchers. Parents who signed up after this date get to apply for tax-free childcare.
In the new scheme, the government pays 20% of your childcare costs. For example: if childcare costs about £600, the government pays £120, and you pay £480. The savings can add up, mainly because all of your children can take advantage of it. Parents can save £2,000 annually per child.
The new scheme is open to parents with employers that run a childcare voucher scheme. However, they do need to meet certain criteria to qualify for this program.
- Parents should have at least one child aged 12 years old or less
- Both parents should work for at least 16 hours, weekly, and they need to earn at least £115 per week
- Parents with a combined income of about £100,000 won’t qualify
The government may have changed the scheme, but the new one is beneficial for parents with more than one child. With the old scheme, parents can only save a certain amount of money. The new program lets you save more money as the government will pay 20% for all of your children.
Do You Need Childcare Services
Several childcare services are available in the UK, and how much they cost also depends on your location. If you’re in South London, don’t hesitate to get in touch with us. Minnie & Mamma are committed to providing only top-notch childcare services to all parents. And there’s more!
At Minnie & Mamma Daycare Nursery, you can get free 15 hours of funding for your 2-year old and about 30 hours of free funding for a child between 3 and 5 years olds. Come to think how much this would cost, this service offered by Minnie & Mamma can significantly help you save more money.
Do you have questions? Feel free to contact us anytime! Our professional staff is more than happy to assist. When it comes to providing childcare in Mitcham, Minnie & Mamma ensures that we only hire the best. We adopt a rigorous recruitment process to ensure that your children get the education they deserve.
Reach out to us today for more info, or visit us at your earliest convenience.