Extra cash on offer for working parents
With childcare costs spiralling, get every penny of help you can, says David Prosser
Saturday 08 April 2006
While critics dismissed Gordon Brown's budget last month as a political statement short on real policy initiatives, it did include some valuable help for working parents. Childcare costs keep rising, but on Thursday, the first day of the new tax year, the help that parents may claim from the State increased.
The Daycare Trust, the childcare charity, says that the typical cost of a full-time nursery place for a child under the age of two has been rising by more than 5 per cent a year. It now costs £141 a week in England, and is only slightly cheaper elsewhere in the UK.
The charity also says that a full-time place with a childminder is about £125 a week, while the typical nanny costs up to £400 a week. Even after-school clubs are expensive, at an average of £45 for 15 hours.
The most valuable initiative for many families is the Government-sponsored childcare vouchers scheme, an increasingly valuable benefit now provided by 5,500 employers at very little cost to them.
It enables staff to take part of their pay in the form of a voucher that can be put towards childcare costs. The cost of this voucher is taken out of your pre-tax wage packet, so you don't pay any tax or National Insurance on this part of your salary. Your employer doesn't have to pay any NI on the vouchers either.
In the Budget, the Chancellor announced that, from this week, the maximum amount of pay employees can take as childcare vouchers would rise from £50 to £55 a week. Assuming they take the full amount, that effectively reduces the cost of childcare by just over £960 a year for basic-rate taxpayers, rising to £1,195 a year for higher-rate taxpayers. You can claim however much you earn, and if both parents work for employers that participate in the scheme, both can join.
If your employer is not signed up, it is worth lobbying the human resources department. "Companies want to know that the administration and costs will be as minimal as possible, but we can make the scheme extremely flexible and simple," says Phillip Waller, of Fair Care Services, one of several specialist companies that administer the scheme.
Most of these providers provide all the documentation that staff will need and do most of the processing and administration. They charge a fee for this service, but it should be less than the savings that employers stand to make on NI contributions for staff who join.
It is not only children in nurseries whose parents can use the vouchers scheme. "Anyone providing Ofsted-registered or approved care is eligible," says Waller. That includes all nurseries, childminders and pre- and post-school clubs, because there is a legal requirement for these carers to register with the education inspectorate.
In addition, many nannies may qualify. Even if they are not covered by the Ofsted system, nannies now have the option of registering with the Government's SureStart service. You can check your nanny's status at www.childcareapprovalscheme.co.uk.
However, not all employers will join up, and the 3.6 million self-employed people in this country are excluded from the scheme.
But vouchers are not the only way that you can reduce the cost of paying a professional to look after your children. Families where both parents work at least 16 hours a week (or single-parent families where mum or dad meets this criterion) may be eligible to claim help with the cost of childcare through the working tax credit.
This is a benefit for families on low incomes. It isn't possible to say exactly what the threshold is, because HM Revenue & Customs takes a range of factors into account on each claim, but if you do qualify, you will be able to claim up to 80p of every £1 spent on childcare, up to £175 a week for one child, or £300 a week for two or more children.
This is another benefit made more generous in the Budget - the childcare help was previously limited to 70p in the pound.
Christine Walton, chief executive of the Daycare Trust, says that both Budget initiatives are good news for working parents, as long as they can actually find childcare provision. "Many parents will gain from the increased help with the costs of childcare," she says, "but next year's Comprehensive Spending Review must include a review of funding for the whole early education and childcare system."
There are other types of help available in limited circumstances. Lone parents, for example, may be able to claim childcare support under the New Deal, in order to help them return to work. Also, a few more employers may offer crèches, under a Budget initiative to support childcare in the workplace.
It is also worth checking whether you are eligible for child tax credits, available to nine out of 10 families. Parents with household incomes of up to £58,000 a year are eligible to claim (rising to £66,000 for families with a child under the age of one). See www.hmrc.gov.uk/individuals.
'My childcare costs are now affordable'
When Gemma Foster joined Praxis Mortgages in Birmingham last year, she was initially disappointed that the firm, which has 100 staff, did not participate in the Government's childcare vouchers scheme. But fortunately, as human resources and training manager, she was able to do something about it.
"I was able to show that it wouldn't cost the company anything other than my time to introduce a scheme," she says. "They were very supportive because they could see the obvious benefits and it was then just a case of working out which staff would be interested."
Gemma had the scheme up and running by November and was one of the first joiners. Her two-and-a-half year-old son Callum is in a nursery four days a week and Gemma claims the full £55 a week worth of vouchers to put towards the fees. "My husband's employer also offers a vouchers scheme, so between the two of us the savings are quite considerable," she adds.
Rain doesn't stop profits at Andy Murray's £600-a-night hotel Cromlix House
Think twice about investing in fine wine - it's a vintage ploy for the fraudsters
Have you checked your pension? Make sure you're not sleepwalking into problems later in your life
Top-five practical tips for parents when planning for their child's future university education, tuition fees, and cost of living expenses
Santander's Kitti app aims to bring the good old cash kitty into the 21st century
- 1 National Orgasm Day: Six reasons (plus one bogus one) why they're good for us
- 2 The 'world's most beautiful vagina' has been debunked by science
- 3 John Green schools morning show hosts after awkward interview with Cara Delevingne
- 4 Doctor Who: Christopher Eccleston says why he left the BBC series after just one series
- 5 'Rowdy' Roddy Piper dies: Wrestling legend dies aged 61, according to reports
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Labour leadership contender Jeremy Corbyn says 'we can learn a great deal from Karl Marx'
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Public anger after French sunbather beaten up by gang for wearing a bikini in Reims park
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...
£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...
£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...
£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...
Day In a Page
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.