The cost of childcare is possibly the biggest expense you will face as a parent – and it is on the rise. Latest figures show it has soared by 77% over the past decade, leading to 500,000 mothers priced out of the workplace, according to thinktank the Institute for Public Policy Research.
Those most likely to decide against returning to work because of a lack of flexible and affordable childcare are mothers of three- and four-year-olds and lone parents, says the IPPR, which supports a universal state-funded childcare service delivered through children’s centres.
Yet while there are plenty of proposals to tackle the financial burden, what can you do now to make childcare more affordable? Here are some families who have worked out a way.
Faye Angel, 37, had difficulty finding childcare solutions in London when she returned to work full-time after maternity leave. She settled on a local community nursery serving Lambeth and Southwark, the Coin Street Family & Children’s Centre, run on a not-for-profit basis. “It has a waiting list so you have to plan ahead, but the monthly cost was approximately £500 cheaper than private nurseries,” she says.
Faye, a fashion designer, and her husband, Daniel, 40, director of a startup, were paying around £973 a month through the centre. “Now May Rose is three we will pay £650 as we get 15 hours free per week,” she says. “But government cuts have had a big impact.”
The family gets involved in fundraising to help pay for extra equipment, and uses its programme of family support and activities.
“These centres are a vital lifeline for parents and local communities. We spend around a third of our monthly salary on childcare, and if the nursery had to close it would have massive consequences.”
You can use websites to find other local families looking for childcare. Some divide a nanny’s time and others have the nanny take care of both children at once, cutting the cost in half.
Vicki Laurie, 33, from Brighton, East Sussex, works full-time as a property consultant and shares a nanny with a local family to look after her daughter Daisy, two. She used nannyshare.co.uk to find a family a few roads away. “It’s brilliant they’re so close, as I don’t drive, and the cost is so much cheaper at around £200 a week. Daisy and the little boy, Jack, get on really well, spending three days at my house with the nanny, and two days at his mum’s.”
When you employ a nanny you take on an employer’s payroll responsibility so have to pay tax and national insurance on behalf of your employee, in addition to employer’s national insurance contributions. The average cost of employing a nanny as part of a nanny share including tax and NICs, is around £350-£420 a week, split between two families, according to nannyshare.co.uk.
Other sites include findababysitter.com, and thenannysharers.co.uk. Websites such as nannytax.co.uk can help sort out tax and NICs.
Friends and family
Emily Williamson, 30, struggled to find affordable childcare for her two children after her husband died in 2009. She is a business development manager for a chain of hotels, and relies on friends, family and childminders to look after Angel, six, and Starr, four.
“I’ve used nurseries and an au pair, but it was far too expensive, and I now pay around £500 a month which is less than it’s ever been,” says Williamson, from Hope Valley, Derbyshire. “I need to work for the money, and to re-establish my life with adult contact, and I’m lucky to have people around me willing to help,” she says.
“Without this, the cost of childcare would more than swallow up my salary, but it’s still really stressful when people are away and I wish there was an after-school club that I didn’t have to pay lots for in the area.”
But she can’t put the 15 hours of free government childcare for three and four-year-olds towards time spent by relatives looking after her children.
If you plan to rely on family or friends, there are rules to consider. Under the Childcare Act, anyone other than close family looking after your child for more than two hours a day before 6pm or after 2am, or for more than 14 days a year, outside of the child’s own home, must be registered as a childminder. This means they must complete a criminal record check, take a childcare course, learn first aid, and pay an annual fee to Ofsted. For more details on this, go to www.ofsted.gov.uk/early-years-and-childcare.
■ Free childcare: The government provides 15 hours for all three- to four-year-olds and, depending on your household income, your child may be eligible at two. This is offered at a range of places including Sure Start children’s centres, nurseries, pre-schools and through registered childminders.
■ Childcare tax credits: If you work for 16 hours or more a week (or if you’re a couple, you must both work more than 16 hours a week) and pay for childcare, you may qualify for the childcare element of working tax credits.
The amount depends on your household income, but if this is under £41,000, it’s likely you’ll be eligible for some money. This can help you with costs, based on a maximum of £122.50 a week for one child, and £210 for two or more children.
To find out whether you qualify, use the tax credits calculator on gov.uk or call the helpline on 0845 300 3900.
■ Childcare vouchers: Employers may offer childcare vouchers that allow parents to save up to £624 a year for higher-rate taxpayers, and up to £933 for those on the basic rate.
The government has proposed a new tax-free childcare scheme that will replace the existing vouchers from autumn 2015. Under this, eligible families will get 20% of their yearly childcare costs up to £6,000 paid for by the government, saving parents up to £1,200 per child.
However, parents cannot simultaneously claim support through the employer-supported childcare voucher scheme and the childcare element of working tax credits.
Source: The Guardian