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Childcare costs: Are you missing out on help with yours?

Changes designed to reduce the costs of childcare will be tested next year – but what if you need help now?

Any parent will tell you kids aren’t cheap, and it’s childcare that’s the real money burner.

Next year the government will trial increasing free childcare for children aged three and four in England. The doubling of free hours from 15 a week in term time to 30 was due to start in September 2017, but today it was announced a pilot has been brought forward a year.

These are on top of changes from September this year which mean the government will contribute 20% of the cost your childcare bill.

All potentially good news for parents – but until these start are you getting as much help as possible with the cost of caring for your kids?

Here are four funding opportunities you should check out:

Childcare vouchers from your employer

You might be able to receive childcare vouchers as a benefit at work, or as a ‘salary sacrifice’.

They might save you money as you get an allowance tax-free. Basic-rate taxpayers can have £243 worth before having to pay NI and tax, and this decreases the more tax you pay.

The vouchers can be used to pay (or part pay) whoever you chose to look after your children, as long as they’re registered and accept them as payment.

Direct payments from your employer

A similar scheme means your employer might pay the carer directly. The tax-free caps are the same as the ones for the vouchers.

You can’t claim Working Tax Credits on childcare paid for in this way or with childcare vouchers, but you can choose to take a mix of the two.

Working Tax Credits

These can be worth up to £122.50 a week – that’s a great help to cover childcare costs.

If you’ve more than one child, the max you can claim is £210 a week in total. Since it all depends on how much you earn and how many hours you work it might be less. But even higher earners might be pleasantly surprised.

Though this and Child Tax Credits are being replaced with Universal Credit, you might not be affected by this change yet, so it’s worth investigating.

 

Grants for students

What’s available depends where in the UK you live, but you might be able to access grants to cover the cost of childcare if you’re a full-time student.

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