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Our Favourite Tips for Funding Childcare

With childcare costs in the UK having risen steeply in recent years, funding childcare has become a worry for many parents. To better inform your childcare decisions, we've got some advice on accessing financial support

 

In the last five years, childcare costs have risen by a staggering 27% and finding the money to meet childcare bills has become a constant battle for many parents across the UK.

It's a situation that is everyone hard, particularly low income and single parent families. However, there is financial support available - it's important to do your research and your sums before making decisions about work and childcare.

We asked the charity Gingerbread, who provide advice and support for single parents, to give us the lowdown on childcare costs and the help that's available.

Help with childcare costs

Financial support available for single parentsWhat are childcare costs like?

Costs vary from region to region, depending on the kind of childcare you need and the age of your child.

It's best to do local research, but these latest figures from the Family and Childcare Trust are a helpful starting point:

  • The average cost of a nursery place for a child under two is now £4.40 per hour across Britain. A parent buying 25 hours of childcare per week for a child under two would face an average annual bill of around £5,710 per year, before help from tax credits
  • For children aged over two, the average nursery cost is £4.22 an hour
  • Childminders on average are slightly lower in cost, at £3.99 an hour for under-twos and £4.02 an hour for over-twos. Childminder after school pickups come in at an average of £65.08 a week.

What help is there with childcare costs at the moment?

  • Childcare costs vary from region to regionDepending on your circumstances, if you're working 16 hours or more a week and eligible for tax credits, the government can cover up to 70% of your childcare costs. For one child it's capped at £175 a week and for two or more children, you can claim up to £300 a week from approved providers
  • To apply for tax credits, contact the Tax Credit helpline
  • You may be able to access Tax-Free Childcare through Gov.UK
  • All 3 and 4 year olds in England are entitled to 15 hours of free early education each week for 38 weeks of the year. Some 2 year olds are also eligible. Visit Gov.UK for more information.

Government funding for childcare

The Government has announced that there will be extra funding support for parents, and there is both good news and bad news. The good news is that there will be more help with childcare; the bad news is that you will have to wait a while.

Parents who get tax credits

  • If you're working and get working tax credits, you should start receiving universal credit instead by the end of 2017
  • Under universal credit, you can get help with up to 85% of childcare costs, but you'll have to wait until universal credit are rolled out.

Tax free childcare

  • 'Tax free childcare' is be available for working parents who earn less than £150,000 a year and don't get working tax credits or     universal credit
  • It is available for all children aged under 12, and those under the age of 16 with a disability
  • Parents can claim up to 20% of the cost of registered childcare up to a maximum childcare bill of £10,000 a year, meaning up to £2,000 a year towards childcare per child can be claimed back
  • Parents will be able to buy a childcare voucher and pay for 80% of the cost, and the government will top up the voucher with the extra 20%.

More information on childcare costs

Working parents to receive universal credit by 2017

To find out more information about childcare funding, you can use Gingerbread's interactive childcare tool.

 
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