Key tip to cut childcare costs that ‘many people don’t know’

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The cost of childcare is getting increasingly more expensive as providers fight to stay afloat amid surging running costs. In fact, according to research by the OECD, the UK places as the third most expensive country for childcare among its members, marginally beaten by Switzerland and New Zealand. However, there is help available for those in need of it – and one may be little known, according to an expert.

Check for free childcare hours

Rhiannon Philps, personal finance expert at NerdWallet, said: “For many struggling parents, the grim reality is that the extra costs of childcare could mean less food on the table.”

According to Coram’s Childcare Survey, the average weekly cost of full-time childcare for under twos last year was around £269, and this figure could be even higher this year.

The expert said: “One way to avoid these costs is to find out if you’re eligible for free childcare hours. Many people aren’t claiming them because they either don’t know about it or it seems too complicated.”

Ms Philps explained every parent in England is eligible for 15 hours of free childcare per week during term time for three to four-year-olds.

She continued: “Other parents could be eligible for up to 30 hours of free childcare per week depending on income, and some parents can receive free childcare for two-year-olds if they receive certain benefits.

“It’s important to know if you’re eligible for any free hours, as a lot of money could be saved by utilising them.”

Claim tax-free childcare for those who work

Under the Government’s tax-free childcare scheme, working parents can receive tax-free money to go towards the cost of childcare for children that are aged 11 or under.

Ms Philps said: “Parents can receive up to a £500 top-up payment four times a year for each child, which can go towards the cost of childcare.”

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Ms Philps said that by setting up a Government childcare account, the government will provide a £2 top-up for every £8 paid in, up to a maximum of £2,000 per year for each child until they reach 11.

She added: “For a disabled child, you can get up to £4,000 a year until September 1 after the child turns 16.”

Get support eligible for Universal Credit

Working parents on Universal Credit could also claim back up to 85 percent of their childcare costs every month, up to £646 for one child, or £1,108 for two or more children.

Ms Philps said: “To be eligible, you and your partner – if you live together – will need to be on Universal Credit and be working, or have a job offer.”

Look out for community support

Those looking for guidance should check their local communities’ family information services. They should be able to provide lists of registered childminders, nurseries, clubs and activities in the area.

Ms Philps also suggested: “It’s worth asking local people on social media for recommendations in groups and forums, while your local authorities and people in your community could offer services such as toddler play groups that could only cost a small fee.”

She added: “Some local councils have nurseries that are run on a non-profit basis. They may have a waiting list, but the cost can be hundreds of pounds per month cheaper than private nurseries. For information on these, search your local authority’s website.”

Make use of cheap or free holiday activities

During the school holidays, ensuring a child is cared for and entertained can be a tricky one. However, there are likely free organisations in the local area that offer activities to keep children occupied and cared for during time away from school.

Ms Philps said: “Community centres, youth groups and your local authority may run specific activities and trips away that are worth exploring. Schools may also have information about holidays and other schemes, and might even run activity groups themselves during the holidays.”

Friends and family

While nurseries and nannies can be too expensive for most families, those who have parents, grandparents or any other family member there to help out can be a good option.

However, Ms Philps said pointed out that there are important rules people must follow when seeking childcare support from someone other than close family.

She stated: “Bear in mind that under the Childcare Act, anyone other than close family looking after your child for more than two hours a day between 6pm and 2am (babysitters, for instance), or for more than 14 days a year, outside the child’s own home, must be registered as a childminder. This involves having a criminal record check, taking a childcare course and paying an annual fee to Ofsted.”

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