It is common knowledge that childcare costs are constantly on the rise and many parents struggle to continue to work and pay for childcare. Yet many are missing out on substantial savings. Parents paying for registered childcare can get help with their childcare costs through using Childcare Vouchers; however, time is running out to join a scheme. Get help with your childcare costs now before it’s too late.
The Government is expected to announce changes to the way in which parents can save money on their childcare in the forthcoming General Election. They are launching a new Tax-free Childcare scheme in the autumn, which will provide parents with savings of up to £2,000 per child, each year. This new scheme will see the closure of the current Childcare Voucher scheme, which enables each parent to save up to £933 per year, to new entrants after the autumn. As well as launching the new scheme, some of the political parties are also promising the extension of the current 15 hour free entitlement to childcare per week for three and four-year olds.
Looking at the savings available, Tax-free Childcare seems to be the obvious scheme for parents to use to maximise on childcare savings. However, with Tax-free Childcare, the Government will be subsidising 20% of a child’s childcare, on costs of up to £10,000 per year. Therefore, to get maximum savings, parents must spend £8,000 per child, each year. To get the maximum savings using Childcare Vouchers, parents are only required to spend £2,916 each year. Both parents can use Childcare Vouchers; therefore savings could double to more than £1,800 at an outlay of only £5,832 per family to get maximum savings.
Depending on your family’s circumstances, will depend on which scheme is best for you. To use Tax-free Childcare, both parents have to be working, whereas with Childcare Vouchers, only one parent needs to be working to access the scheme. Therefore, if your household has only one parent working, Childcare Vouchers are always the best option for your family.
As the Childcare Voucher scheme will be closed to new entrants after Tax-free Childcare is introduced, if they are the best option for maximum savings, now is the time to be getting on a scheme before it’s too late. Childcare Vouchers are offered to you through employers. If your employer does not already offer a scheme, speak to them about setting one up now to enable all those paying for registered childcare to benefit from more affordable childcare.
If Tax-free Childcare is going to be more beneficial for your family, there is no need to wait to make savings; you can still join a Childcare Voucher scheme now to make savings on your childcare costs before the new scheme is launched. By doing so, you will have the right to choose whichever scheme is best for you when the time comes.
More details about the changes to childcare funding are expected to be released after the General Election. For more information about Childcare Vouchers and your options, please visit www.busybeesbenefits.com or contact 0330 333 9100.