Having children, whilst a joyous endeavour, does provide some difficulties if both parents work, especially if the work hours go beyond school or nursery hours. Childcare is a big topic at the moment, with the recently released budget from Chancellor Jeremy Hunt giving, “Childcare revolution to expand 30 hours free childcare for children over the age of nine months, alongside boosts to subsidised childcare for parents on Universal Credit including upfront support”. There has also been an increase in Universal Credit support for those with children, “The maximum claim (will be) boosted to £951 for one child and £1,630 for two children – an increase of around 50%”.
Childcare is no lowly cost. The UK ranks amongst the most expensive countries to attain childcare, with a full-time fee for children at nursery almost £269 a week – an eyewatering £14,000 annually. Even if a mother or father can take on a part time role to support their child, the cost is still £137 weekly for 25 hours of childcare in nursery. After school clubs are £62 a week in the UK, which racks up to around £2,423 a year – much better than supporting children full time in nursery, but still a very high burden for 5 to 11 year olds. Of course, when children reach a certain age into their early teens, they are often trusted to take themselves home and provide care to other younger children whilst parents are out or working long shifts like nurses and doctors.
For those who are working and providing crucial services to the NHS, there is the Tax-free childcare initiative. This scheme is an online account via GOV.UK which allows parents to pay money into the account and the money is used to provide childcare with registered providers. For every £8 paid in, the government will top up £2, up to a maximum of £2,000 of support per year. This is eligible to children up to age 11, which typically ends earlier than employer schemes. There is also the NHS Childcare Allowance bursary which is open to NHS students (such as nurses) for those using registered childcare providers and with children under 15. If you meet these requirements, you can get 85% of the gross cost covered up to £128 a week for 1 child or £191 for 2 children.
There is also the prospect of salary sacrifice for pre-taxed earnings which go towards childcare vouchers. The scheme closed in 2018 to new entrants but those who are still using it managed to get in on a really good aid – the amount is tax free and does not have national insurance paid on it and thus the employee saves nearly £1000 a year. The sacrifice of part of their pay is a good way to save money through zero taxation on that sum, and each parent can sacrifice £243 pounds per month into the voucher account. This saves around £77 a month or £933 a year. Employers save money by providing Childcare Vouchers to their employees and do not have to pay 13.8% employer’s National Insurance Contributions on the salary their employees have sacrificed into their Childcare Voucher accounts. This scheme was closed because the previously mentioned government top up scheme works out better for most NHS workers.