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Free childcare: why aren't you claiming it?

kindergarten 2204239 640Fortunately, my days of paying for childcare are long gone. When I lived in London and had a full time job, I was paying £200 a week for a childminder. As the childminder also seemed to go sick fairly regularly, meaning I had to take time off work – and if the boy even showed signs of sickness she wouldn’t take him (though I still had to pay) it wasn’t conducive to an easy life or career and was partly why I gave up the full time job and moved away from London.

If you’re lucky enough to have it, then good childcare is brilliant – but expensive. So how come lots of working parents don’t even claim the free care they are entitled to? A report from investment house Killik & Co says that many working, middle class parents aren’t even claiming the 30 hours of free childcare for those aged three and four (it was 15 hours until September 2017) that they are entitled to. As 30 hours a week are on average worth £6,384 a year it’s madness not to get it if you can.

And there’s a second element that is also not being claiming. This involves opening up a Tax-Free Childcare online account via www.gov.uk (there have been plenty of reports about problems doing this). If you spent £8,000 on childcare (easy enough if you’ve got children too young to qualify for the free three to five year old place) through the account then you could save £2,000.

However, the Killik report says many parents are still using the Childcare vouchers rather than the new account. Childcare vouchers which are being phased out for new applicants in April, were at least easy enough to understand: you could take £55 a week of your salary as childcare vouchers and thus not pay National Insurance on that money. If you get these vouchers already, you can carry on taking them – if your employer carries on with the scheme. But you can’t have them and the Tax Free Childcare account at the same time. There is a calculator here (https://www.gov.uk/help-with-childcare-costs) which lets you decide whether you’d be better off under the new system. Good luck with that. Whatever else it is, getting free or cheap childcare patently isn’t childs’ play.

In the red on Blue Monday
New year, new savings resolution

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Saturday, 20 April 2019