Parenting

How to save money on childcare costs


Parents are struggling to cover high childcare costs (Picture: Getty Images/Image Source)

Parents reading this won’t need me to point out that childcare can be expensive.

From daycare to days out, the prices can be eye-watering. But there are ways that you can cut these costs.

The first thing to do is understand your circumstances, as this can affect what you’re entitled to when it comes to tax-free childcare or tax credits.

For 25 hours of care, a childminder is roughly £120 for children both over and under the age of two, and nurseries are a bit more expensive, working out at £138 a week, according to Coram Family And Childcare.

Nannies are entitled to the national minimum wage, which means a 25-hour week will cost at least £237.50 (if they are aged 23 or over) and, as their employer, you will be expected to pay tax, National Insurance and pension contributions.

Once you’ve worked out which type of care is best, you can look into the help available from the government to pay for it.

Childminders are a slightly cheaper option than nursey (Picture: Getty Images/Image Source)

The government has introduced a tax-free childcare scheme that pays working parents a top-up based on their childcare costs.

You can receive up to £500 every three months for each child that’s looked after by an approved childcare provider. Eligibility criteria, such as proof of working at least 16 hours a week and income limits do apply.

If you’re on a limited income, Working Tax Credit and Universal Credit both have childcare elements, where the government gives you extra money towards paying for childcare.

To qualify for working tax credit, single parents must work at least 16 hours a week and couples with children 24 hours between them, with one working at least 16 hours.

One of you can be out of work if you are entitled to carer’s allowance, in prison, hospital or incapacitated.

There’s also the opportunity to take advantage of free childcare hours. In England, schemes to help parents with young children under two exist for those who receive benefits such as income support, income-based jobseekers’ allowance and Universal Credit.

You can also get free childcare in England, Scotland, Wales and Northern Ireland for three and four-year-olds. In Scotland, you’re entitled to 1,140 hours of free childcare a year (double the figure of 570 in England); in Wales, it’s 30 hours of free childcare per week (split between education and childcare); while in Northern Ireland, it’s 12.5 hours of free childcare per week during term time through a funded preschool place.

To help cut the costs, you could consider either nanny or parent-sharing. Finding a friend or neighbour who’s also looking to cut their childcare costs could enable you both to come to an agreement that works for all parties.

Not all employers have flexible working arrangements, but it is worth asking whether you can tweak your working patterns to fit around your childcare commitments.

If your child is at school, the stretch of the six-week summer holiday can be a daunting prospect.

However the Coram Family and Childcare website, which lists organisations in your local area where you can find information about childcare and family services, could be worth exploring. Local councils may also run activities for children during the holidays.

And finally, don’t forget about Child Benefit. These payments from the government are intended to help with the maintenance of all children in the UK, and they can help ease the strain of the costs.

For the 2022-23 tax year, you’ll get £21.80 for your first child and an extra £14.45 a week for any additional children.

Reena Sewraz is senior editor at Which? Money; for more free money-saving tips and consumer rights advice, visit Which?.

If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.


MORE : Kids are so expensive that I had to quit my job – I couldn’t afford childcare


MORE : 30 hours free childcare: Who is eligible and how to apply?


MORE : Childcare is costing parents more than half of their pay





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.