How to make work pay this summer

Childcare costs can take a lot of fun out of summer, but there are ways to fight back

Felicity Hannah
Friday 28 June 2019 13:44 BST
Portrait of a boy in sunglasses on sunny day
Portrait of a boy in sunglasses on sunny day (Getty/iStock)

It’s July, which means parents across the UK are sucking in a deep breath and organising their summer childcare.

This can be a painful time of year and for some families, the cost of childcare can rival the bills for Christmas.

Yet over summer, UK parents will spend an average of £250 each, according to an analysis by Hargreaves Landsdown – and many will spend more, especially if they have more than two children.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Some 60 per cent of children have working parents, and when you’re trying to cover six weeks of care, summer holidays can mean an endless, exhausting and expensive juggling act.

“It’s no wonder the summer break is such a drain on your finances and that one in 20 parents spends more than £500 on care over the holiday.”

Magical days out

And, of course, many parents will also feel the pressure to entertain their children with exciting, adventurous, maybe even educational days out.

Post Office Money’s Parents’ Summer Spending report revealed that families typically spend £624 each entertaining their children during the summer holidays – a 25 per cent jump since 2014.

Parents everywhere will be anxiously adding up the cost, working out what’s affordable, taking unpaid leave and doing everything they can to make it affordable.

Some have grandparents to lean on but many do not. So for those anxious, stressed, loving parents who want their children to have fun, want to keep their jobs and want to stay out of debt what is the answer?

There’s no silver bullet to the cost of summer. Even if schools changed the term times to even out the breaks or if more affordable childcare was available, it’s still going to cost families money to work while the kids are off school.

However, there are ways to bring the cost down as much as possible – and there is still time for parents to do so.

So before you empty your bank account or max out a credit card to cover the cost of childcare – and before you get too dejected at the idea of effectively working for free this summer (the writer of this feels your pain!) – there are steps you can take to get more childcare for less.

Here’s how...

Get your tax breaks

If you are already able to get childcare vouchers via your employer then that can make a massive difference to the amount you pay for summer cover.

Childcare vouchers aren’t just for nursery, they can be used for after-school clubs, holiday clubs, even some activity and sports clubs. Because parents can buy them out of their pre-tax income, they effectively get their childcare tax-free.

But the scheme isn’t taking on new parents, so now the option for any new applicants is tax-free childcare.

That’s good news in many ways, it means that the self-employed can finally access a tax-break on their childcare. Under the scheme, parents and guardians pay money into a digital wallet that the state tops up – so for every £80 paid in, £20 is added. They can then use that to pay for childcare.

Unfortunately, the system is seriously underused by parents, with just one in 14 eligible parents making use of it. The Office for Budget Responsibility had forecast spending £800m on tax-free childcare in 2017-18, but that was revised down to £37m specifically because of low take-up.

But that could be worth a substantial amount to parents this summer and, while the system has had its criticisms, it’s not that hard to use. Apply now and get the tax office to help with your summer care costs.

Book now. Not tomorrow, now

If you book your holiday clubs nice and early then you may be able to qualify for special discounts.

Most importantly, you will have your pick of the best value clubs – which you won’t if you leave it until the last minute.

Spread your 30 funded hours

All parents of three and four-year-olds qualify for 15 funded hours of childcare a week and parents who work at least 16 hours a week qualify for 30 funded hours.

If you are a parent who qualifies for 30 funded hours of pre-school childcare a week then that can make a big difference to your bills. But it’s no help in the school holidays as it only covers term-time childcare.

The good news is that you actually qualify for those hours over a year, which means 570 hours of funded childcare for everyone and 1,140 for those who work 16 hours a week or more. Talk to your childcare setting about whether that could be spread out across the year for you, evening out your childcare costs.

Shop around for cheaper childcare

Obviously, no one wants to leave their children in poor quality childcare but there are a lot of different clubs and deals, meaning it’s worth shopping around.

For example, this summer Sainsbury’s is offering daily childcare for just £7.50 each, including lunch – and you can pay with Nectar points. Frustratingly, you can’t pay with childcare vouchers or tax-free childcare for that one.

Many holiday schemes offer a discount if you buy a full week or set amount of days so spend some time finding out what’s available in your area. If they discount a week-long booking but you need scattered days, then ask if they will give you the discount if you book five days at a time.

Ask to work flexibly

You have a legal right to request flexible working and to have that request given serious consideration by your employer.

That can make it easier to work around the cheaper clubs that finish earlier or it could even mean asking to work term-time only if that is more affordable.

Parents of older children could always ask about working from home, allowing them to do their job but also keep a watchful eye on the kids.

Ask for help

It seems like every week there’s another news report about how much of a contribution grandparents make to working parents by providing free childcare.

But if you don’t have grandparents available or willing to help then that can just seem like a kick in the teeth.

One solution could be to build your own support network. Could you and some friends swap childcare over the summer, providing the kids with company and the parents with cost-free childcare?

It’s worth asking around because many, many people will be in the same boat.

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