Understanding childcare options

Everyone seems to be talking about the cost of childcare these days. And it’s true, bringing up children isn’t cheap. Fortunately there are lots of childcare options out there to suit you, your child and your budget. Better still, there’s more financial help available than you might imagine.

What childcare options are available?

The list below is far from exhaustive but it will give you a good idea of what’s available and what your childcare costs are likely to be. Don’t forget to discuss your needs (and your budget) with your family – flexible working hours and willing grandparents can make all the difference to your childcare arrangements.

Type of childcare

How does it work?

How much does it cost?

Registered childminder

Someone who looks after up to six children under 8 in their own home, including up to three children under 5 and one under 12 months. Many will work flexible hours and pick up/drop off children at schools and playgroups. Childminders also care for older children but do not need to be registered for this.

Average £75 to £120 per week (25 hours) depending on where you live.

Playgroup or pre-school

Community- and voluntary-run care and education for 3-5 year olds. Typically morning and afternoon sessions daily during term time.

£3 to £9 per session. If your child is aged 3 or 4 they are eligible for 15 hours free care per week.

Day nursery

Care and education from 6 weeks old to 5 (although some only start from 2). Typically, open weekdays from 8am to 6pm throughout the year.

£80 to £120 per week (25 hours) depending on where you live. If your child is aged 3 or 4 they are eligible for 15 hours free care per week.

Nursery school

Care and education for 3-5 year olds. Open during regular school hours during term time.

Free if part of a state scheme, otherwise about £150 per week. If your child is aged 3 or 4 they are eligible for 15 hours free care per week.

Au pair

Lives with a host family and learns the local language and culture while providing around 30 hours’ help with the children and around the home.

‘Pocket money’ of around £70 to £85 per week plus room and board.

Nanny

Tend to have a more formal live-in or daily role to suit the needs of you and your child. You’ll be the nanny’s employer so you must deal with PAYE to collect tax and National Insurance on their pay. If necessary, you’ll also have to provide food and board. Nannies can voluntarily register with Ofsted.

£280 to £500 per week, plus tax and National Insurance contributions.

Informal childcare arrangements

An increasingly common arrangement where parents share childcare with friends, or even tailor their work patterns to suit. For example, two or more parents work part time and look after each other’s children on their days off (known as reciprocal childcare).

Technically free, but you’ll need to factor in loss of income – and you won’t get any money from the state to help.

Weighing up the cost of childcare

In reality, there’s much more to it than cost. Choosing the right childcare also depends on your needs and the needs of your child. For example, are you planning to work full time or part time, study, or even run a business from home? And what about your child – do you want them cared for in your own home or with other children?

In the end it’s likely to be a balancing act between what you need and what you can afford. You could also look at the Ofsted report for each childcare provider and visit several.

Childcare vouchers, tax credits and other help with childcare costs

You don’t need to be on a low income to get help. Financial and practical assistance with childcare is available from many employers and from the state, but only for registered childcare.

Do your homework

If you’re on maternity leave and know you’ll be returning to work or study, make sure you plan ahead.

  • Research the childcare options in your area – look into cost, quality and availability. You can get this information from your local Family Information Service
  • Talk to other parents – nothing beats personal recommendation.
  • Put your child on a nursery or playgroup waiting list if you need to – sometimes you'll need to do this before the birth to be sure of a place.

Family help with childcare

Normally, childcare provided by a grandparent or another relative is not eligible for tax credits.
However, there is one exception. If the relative is a registered childminder and:

  • they look after your child in their home rather than yours
  • they look after at least one other unrelated child too

Find out what counts as eligible childcare costs for tax credits on the HM Revenue & Customs website.