Five Ways you can Save on Childcare Costs
31 March 2023
There’s no doubt about it, childcare in the UK is expensive, and it’s only set to rise. If you’re wondering how you’ll ever pay for your children to attend an early years setting, here are five ways to save money on your costs.
30 Free Hours
30 Free Hours is a British government scheme to help working parents with childcare costs. It’s available from the term your child turns 3. For provisions providing childcare for 38 weeks of the year, your child could receive a total of 30 free hours each week, and for provisions open 52 weeks of the year, it ‘stretches’ to cover 22 hours a week. 30 Free Hours are available for parents working 16 hours per week, or the financial equivalent. However, you must apply via the Gov.UK website. Doing this before your child turns three is essential so you have the code to give to your childcare provider in time.
Tax-Free Childcare
Tax-free childcare is a government scheme that can dramatically reduce your monthly childcare fee. For every £8 you pay, the government will add £2, totalling a 20% reduction in your costs. This could be as much as £2000 per year, although you could receive more via this scheme if your child has a disability. However, not all childcare providers have signed up for the system, and it’s worth checking first if it’s a scheme you’d like to use.
Tax-free childcare and 30 free hours are like partners. The eligibility criteria are the same, and you’ll discover if you’re eligible for both simultaneously.
Universal Credit
If you’re 18 or over and have less than £16,000 in income and savings, you may be eligible for Universal Credit, which can really help towards childcare costs. If you have one, you must complete the application with your partner, and how much you receive is unique to your situation. However, a couple over 25 could receive up to £525.72 monthly.
Child Benefit
If you haven’t signed up for child benefits yet, you really must. It’s available if you have children under 16 as soon as they’re born, and until they’re 20 if they stay in full time education. You can also claim it if you’re fostering and as soon as you adopt. It can really make a difference to your household income and towards covering childcare fees. Currently, for your first child, you’ll receive £21.80; for any child that follows, you’ll receive £14.45. There is no cap on how many children you can claim child benefits for, although it could be taxable if you or your partner earn over £50,000 a year.
Childcare Grant
If you’re a parent looking for support to continue your studies, a childcare grant may be available to help you. Your eligibility depends on your university and the course, but it could be the difference between being able to continue or not. The amount you could receive also depends on your household income and how many children rely on you. During the 2023-2024 academic year, this could be 85% of your childcare costs.