Financial support for childcare costs announced but …… wait for it ……….wait for it …….

by ParentalChoice
in Financial Planning, Family, Childcare
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Easy Money

Easy Money (Photo credit: @Doug88888)

The Government is trying very hard. Very hard to help working parents deal with some of the highest childcare costs in the world with many mothers choosing not to go back to work because financially they are better off staying at home. This is a drain on the economy as well as on families’ personal finances. In addition over 1 million families have lost an average of £1,500 a year each when child benefit entitlements were reduced in January for those earning £50,000 or more. All working families are struggling right now to balance their finances, with childcare quickly becoming the greatest household expense even before rent or paying the mortgage. So after months of political discussions and the initial announcements by Liz Truss and co. on improving the provision of childcare, the Government has now announced their financial incentive to help parents pay for childcare and get mothers back into work: vouchers worth up to £1,200 of childcare costs for each child.

£1,200 is the current estimated cost by the Government of approximately 20% of the average annual price of a nursery place in the UK. In addition they say that the measures introduced by Liz Truss to allow nurseries and childminders in England to look after more children from September 2013 , as well as the setting up of childminder agencies from 2014, will make more childcare places available and hopefully reduce childcare costs in the long term. The final goal is to help working parents back to work.

The facts:

  • Initially the vouchers will cover each child in a family up to five years old, but will eventually include all children under 12.
  • They will only be available where both parents, or the one parent in single parent households, are working.
  • They are only available where each parent earns less than £150,000 a year and are not receiving the new universal credit.
  • The vouchers will be provided to self-employed parents
  • They will replace the current employer supported childcare voucher scheme with parents able to register for the vouchers through their nursery or their employer.
  • The vouchers can be used to pay for any nanny, childminder, nursery or other Ofsted registered childcare provider.

All good news but they are only being introduced in 2015.

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