Parents could be £480 a year better off under new plans to tackle childcare costs
THE government is set to slash the cost of childcare to help hard-pressed parents struggling in the cost of living crisis.
New plans set to be announced this week could see families save £40 a week - or £480 a year.
Childcare rules will be loosened in an effort to reduce the cost of caring for kids which can add up to thousands of pounds a year.
Some parents report that nursery fees can cost more than their monthly mortgage payments.
And women are being forced to re-think their careers, reduce hours, or even leave the workforce altogether because they cannot afford rising bills.
A part-time, 25-hour nursery place for under twos costs £7,160 a year, on average, according to a 2021 Coram Family and Childcare survey.
Read more on kids costs
The government plans to increase the number of children each member of staff can look after at nurseries,
Currently there is one carer per four children and that could be increased to five.
And childminders will be allowed to care for kids in locations other than their homes, like community halls.
The measures are not expected to put cash directly into parents pockets, like with other schemes like tax-free childcare.
But they could reduce the cost of childcare overall if providers adopt the changes.
The government estimates it could save £40 a month. That's based on a family paying £265 a week for a child under the age of two.
Prime Minister Boris Johnson first hinted a childcare costs shake-up was on its way in April, as families were hit by a raft of bill rises.
The PM today told Sun on Sunday readers about its £37billion package of support to help hard-up households struggling through the cost of living crisis.
He said: "It includes a council tax rebate, a cut in fuel duty, at least £400 for every household to help with energy bills and at least £1,200 for the eight million most vulnerable households.
"We’re delivering the biggest ever increase in the National Living Wage, worth an extra £1,000 a year for those working full-time.
"And we’re helping another million families keep around £1,000 extra a year by cutting the Universal Credit taper rate."
Around 30million workers will this week see more in their pay packets when a change to taxes comes in.
From Wednesday (July 6) the National Insurance threshold will rise from £9,880 to £12,570.
Help with childcare costs
There are a range of tax breaks and grants to help make childcare more affordable.
You can usually use them for care like registered childminders, nannies, playschemes, nurseries and holiday clubs.
Tax-free childcare
You can get up to £500 every three months - up to a maximum of £2,000 a year - for each of your children to help with the costs of childcare.
If your child is disabled, it's even more - £1,000 every three months, up to £4,000 per year.
For every £8 you pay into this account, the government will add £2 which you can 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.
Your tax credits will stop immediately if you successfully apply for tax-free childcare. You will also have to cancel your Universal Credit and 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 for one child or £1108 for two or more up to August 31 following the child’s 16th birthday.
15 or 30 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.
Free childcare for 2 year olds
Parents living in England and claiming certain benefits can access free childcare for their two-year-olds, including: