Update on Tax-Free Childcare and Government pledges for help with costs
Budgeting for childcare in the UK is top of the list for most families when it comes to paying the monthly bills. In the UK the average cost of sending a child under the age of two to nursery part-time is £127 a week. For full-time hours, this rises to £242.
Tax-Free Childcare Scheme
Tax-Free Childcare was a scheme introduced by the government in April 2017 and has been rolled out to parents with children under 12.
How it works:
- As part of the scheme, a parent opens up an online account, which they pay into to cover the cost of childcare.
- For every £8 a parent pays into the account. the government will pay in an extra £2. Parents can receive up to £2,000 per child, per year, towards their childcare costs.
- If your child is disabled, you may get up to £4,000 a year until they are 17 if they get Disability Living Allowance, Personal Independence Allowance, Armed Forces Independence Allowance or are certified as blind or severely sight impaired.
- Tax-Free Childcare is available to ALL eligible workers, including the self-employed.
- It’s not just parents who can pay into the account – grandparents, other family members and employers can all pay in as well.
- The funds can be withdrawn for additional purposes if necessary, although the government will deduct its corresponding contribution.
Free childcare for 3-4 year olds
In addition to the Tax Free Childcare Scheme, the government also offers all 3-4 year olds in England 570 free hours of childcare per year. This is usually taken as 15 hours a week over 38 weeks, but you can choose to take fewer hours over more weeks.
Parents must be living and working in the UK to be eligible and you can continue to get the following support while receiving the free hours:
- Tax credits
- Universal Credit
- Childcare vouchers
- Tax-Free Childcare
What help can I get?
Use the Gov.UK calculator to find out how much you could get towards approved childcare.
Pre-Election Pledge Update:
An article published by the BBC, stated that both Labour and the Liberal Democrats have pledged extra money to support the parents of young children.
Labour has vowed to spend £1bn on opening new early years centres in England which they said would get parents back to work and help children achieve.
The Liberal Democrats are promising working families subsidised care for children from the age of nine months. Liberal Democrats education spokesperson Layla Moran said the £14.6bn policy was “an investment in the country’s future”.