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If you are a working parent, you will be only too aware of the cost of childcare in the UK. In many cases, this cost absorbs most of the money you earn from working. Whilst the cost of childcare depends on the age of the child, the number of hours and the type of care they receive, the average cost of full-time nursery is around £15,000 a year, and a childminder around £13,000.
But in the March Budget, Chancellor Jeremy Hunt announced important changes to the provision of free childcare in the UK. In this article we explain what these changes are, when they will take place, and how they will affect you.
There is currently some provision for free childcare in the UK, and also some additional tax incentives and benefits that can be claimed. Let’s take a look:
In the UK all children aged 3 and 4 are eligible for some free childcare. In England they are entitled to 15 hours of free childcare per week during term time. If both parents are working, and earn at least £152 per week, this rises to 30 hours of free childcare per week.
The free childcare must be provided by an approved supplier, including:
Some children aged 2 can also have 15 hours of free childcare – for example if the family receives Universal Credit.
In addition to free childcare, there is also a government tax-free childcare scheme. Under this scheme,, the government will pay 25% of the childcare costs for each of your children, up to a maximum of £2,000 per child per year (£4,000 for disabled children). The government tax-free childcare scheme can be used as well as free childcare hours if you qualify for both.
There are also two other schemes that can help with childcare costs:
In the March budget, Jeremy Hunt announced several changes to the provision of childcare in the UK. these fall into two categories : free childcare and payments for childcare:
Over the next couple of years, free childcare in the UK will be extended. The free childcare scheme will be expanded so that by September 2025, all eligible children aged between 9 months and 3 years will get 30 hours free childcare per week.
Here’s how the changes will evolve:
Also by September 2026, the government will ensure that all schools in England offer wraparound care to all children from 08:00 until 18:00. This will be done in various ways, for example breakfast clubs and after-school clubs.
There are changes to the benefits people can receive to help with childcare, and also additional incentives for people who want to work in childcare.
Families on Universal Credit will see an increase to the amount of help they receive for childcare. They will be able to claim up to £951 each month for one child and £1,630 for two – an increase of around 50%.
Another significant change is that they will be able to access the funds upfront rather than having to pay then claim. This should remove any gap between starting work and receiving support for childcare.
The government will offer incentives – known as start-up grants – for people signing up to become childminders. Childminders who register directly with Ofsted will receive a start-up grant of £600, and those who register with a childminder agency will receive £1,200.
The hourly rate paid to childcare providers by the government will also increase.
From September 2023, the staff-to-child ratio – the number of children one person can look after at a time – will increase from four to five.
We hope that the information in this article helps you to understand what support is currently available for childcare, and how this is going to change over the next couple of years.
In the meantime, if you need help with childcare or other family finances, remember that Loans 2 Go offer online loans that may be able to help.
Do visit us here again soon for more financial and lifestyle tips from Loans 2 Go.
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