Grandparents who babysit can save parents £28,000 – how to get help with childcare costs
FAMILIES can save £28,000 a year if grandparents agree to babysit - and there are other ways to cut childcare costs.
If you're lucky enough to have family nearby to help look after your kids, you could save thousands of pounds.
Childcare can be expensive and many households are looking to reduce their spending due to the rising cost of living.
A calculator, created by online retailer Prezzybox, found that you could save more than £28,000 a year with parental help.
That's based on a family living in London, with a child under 3 and one aged over 3.
It's also dependent on the grandparents stepping up five days a week, and is based on the average cost of childcare per hour across an eight-hour day.
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Childcare costs will vary across the country, but the calculator estimates it would cost around £6.
The actual amount you'll save is dependent on where you live, if you claim any benefits and how often your parents can help you out.
If you're a grandparent who is looking after children, you might be able to get extra cash.
To compensate them for their time, grandparents could be eligible for extra credits which go towards calculating their state pension.
These credits are known as "specified adult childcare credits" and are worth £267 a year.
They count as a national insurance contribution (NIC) credit for those who don't otherwise work.
This is important because you need at least 10 years' worth of NI payments or credits to qualify for the state pension, and at least 35 years' worth to get the full amount.
How can I save money on childcare costs?
If you can't get help from your family, there are schemes to help you manage the cost of childcare.
For every £8 you pay into this account, the government will add £2 to use to pay your approved provider.
You should bear in mind that you can’t claim tax-free childcare if you receive working tax credit, child tax credit, Universal Credit or childcare vouchers.
Universal Credit childcare costs
If you claim Universal Credit, you might be able to get a refund on most of your child care costs.
You can claim back 85% of childcare costs up to £646.35 for one child or £1108.04 for two or more up to August 31 following the child’s 16th birthday.
You will have to pay your childcare costs yourself up front and then claim the money back through Universal Credit.
15 hours free childcare
All three to four year old children in England are entitled to 15 hours of free childcare - amounting to 570 hours per year - from the term after their 3rd birthday.
The free allowance is usually taken as 15 hours per week for 38 weeks of the year, but it is possible to take it at a time that suits you.
For example, you could take fewer hours over more weeks.
The free early education and childcare must be with an approved childcare provider and stops when your child starts school.
Parents are expected to cover extra costs like meals, nappies or trips.
30 hours free childcare
Working parents may be eligible to get more hours of free childcare for their three to four year olds.
In order to access the extra 15 hours per week, you must be working at least 16 hours a week on average and earning the National Minimum Wage or more.
For example, over the next 3 months you expect to earn at least £1,853.28 - the National Living Wage for people over 23.
If you have a partner, they’ll need to expect to earn at least this much too.
You can get 30 hours of free childcare per week for 38 weeks of the year - during school term time.
You may be able to get free childcare for 52 weeks if you use fewer than 30 hours per week.
Check with your childcare provider to find out if this is something they offer.
Once the application has been approved, you’ll get a code for 30 hours free childcare to give to your childcare provider.
Free childcare for 2 year olds
Parents living in England and claiming certain benefits can also access free childcare for their two-year-olds.
You are entitled to the extra free childcare if you currently receive:
- Income Support
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Universal Credit, and your household income is £15,400 a year or less after tax, not including benefit payments
- tax credits, and your household income is £16,190 a year or less before tax
- the guaranteed element of Pension Credit
- the Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit)
However, you may still have to cover extra costs like meals, nappies or trips.
Asylum seekers are also able to access this benefit.
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Child tax credits
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Parents can claim a basic rate of £545 per year in child tax credit, with an additional £2,845 per child.
If your child is disabled, you will be entitled to an extra payment of up to £3,435.
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