Childcare: the options and how to pay for it

Are you looking for childcare? If so what are the choices available to you? And how can you bring the cost down?

You may have heard that the Government has recently launched two new schemes which it says are aimed at bringing down the cost of childcare.  They are tax-free childcare and doubling the number of hours of ‘free’ childcare a week [to 30 hours] for eligible three and four year olds. There are questions with regard to whether the extra childcare is free because some parents are having to pay for any extras and in some cases nurseries are having to put up the cost of childcare outside the 30 hours.

Parents can register for Tax-Free Childcare and the extension of free childcare through the Childcare Choices government website which gives information about the new schemes. The government says tax-free childcare can cut childcare costs for working families across the UK by up to £2,000 per child per year, or £4,000 for disabled children, but the amount parents save will depend on how much they spend on childcare. They will have to pay fees upfront and claim the tax back. It is currently available to those with children who are under 12.

Because of the new scheme, the Government will be closing the childcare voucher system to new joiners from September 2018. Childcare voucher schemes are currently offered by some employers and allow staff to claim back the tax on their childcare costs.

Eligible parents of three and four year old children living in England can apply for 30 hours of free childcare, worth around £5,000 per child. The extension will be available to parents who work over 16 hours a week – whether on an employed or self-employed basis – and earn the national minimum wage, but under £100,000 a year.

The Childcare Choices website includes a Childcare Calculator so parents can check what childcare support works best for their families.

The start of the journey

These are the latest developments, but what if you are at the very beginning of the childcare journey and thinking about what kind of childcare might be appropriate for your child?

It is important to investigate the possibilities early because childminders and nurseries may have a waiting list. What you need to work out first is what kind of childcare best suits your needs. What childcare you feel comfortable and what will make you feel less stressed?  For example, do your working hours vary? Is flexibility important? What can you afford? What age will your child be when you start using childcare? Are they open to new experiences and ready to interact with lots of other children or would they prefer a more homely environment?

The main types of professional childcare available are:

· Nursery
· Childminder
· Nanny

A good place to begin is with your local family information service. In addition to providing a list of local childcare options, it also gives advice on what to look for and questions to ask when you are investigating the best childcare for your child.

Registered day nurseries are regulated by Ofsted and you can look up their most recent report on the Ofsted website. Ofsted inspects for quality of care and safety. One big advantage of nurseries is that they offer full-time guaranteed care for at least 50 weeks of the year – if a staff member is sick there is back-up, unlike with a childminder.

Many nurseries now offer flexible options for parents, including a full or half day and some also offer a school day [9-3 or 3.30pm]. Check with the nursery about their opening times. Most open from 7am to 7pm, although hours may vary. Costs vary so it is worth looking around. Children over three qualify for a government subsidy of 15 hours free childcare. As mentioned above, this has been extended to 30 hours for some children. Check that your nursery is able to offer this as not all will.

Most nursery staff are qualified, but it is worth asking what the ratio of carers to children is – there should be three children to a carer for under twos, four children per carer for over twos and eight children per carer for older children. Some nurseries offer after school care for older children so that is worth checking. Most nurseries offer a settling in period where you attend with your child, then leave the child for a short time until at last you leave them for a longer period.

Nursery schools/classes offer places for three and four year olds at local schools. They usually offer either a morning or afternoon session, but many are now providing a full school day – 9.30-3.30pm. This is free of charge. Some may offer out of school care and holiday schemes, but most do not.

Registered childminders are also regulated by Ofsted, although some come under childminder agencies which monitor the standard of care and help parents find the right childminder for them. The children’s information service has a list of registered childminders in your area.

Registered childminders have to undergo basic training, including first aid, and most do other professional development training. They generally look after children in their own home and are allowed to care for six children under eight, but no more than three can be under five. This includes their own children. The childminders determine their own hours in consultation with you, but many are prepared to do more flexible hours than a nursery can offer, such as evenings and weekends. Childminders are often willing to pick up older children from school, but if they look after other children and have their own children your child will most likely have to be at the same school. They are inspected by Ofsted to ensure they cater for the different developmental stages of the children in their care.

The average cost of a childminder tends to be much cheaper than nursery fees. Many childminders also offer settling-in periods.

Nannies have the big advantage of being able to care for your child in your home and to fit around your domestic/working life. Most have a recognised qualification in childcare. They do not have to be regulated by Ofsted, but they can apply to be registered under the voluntary part of the Ofsted Childcare Register [this includes a criminal records check]. Always use a reputable agency to hire a nanny and check references. Costs can vary quite widely so check with your provider. This depends on whether they live in, their experience and the hours they work. As their employer, you will also have to pay their tax and National Insurance contributions, plus holiday and sick pay and you will need to pay for them to go on your car insurance if you want them to use your car.

You can cut the costs further by checking out if you qualify for tax credits – to do this you need to employ a registered or approved nanny. Another way of reducing costs by up to a half is by doing a nanny share, whereby you share your nanny with another family. There are different types of nanny share, from a five days a week share with children being looked after together, a part-time share with children being looked after together two or three days a week and a split week share to a main family share with one family employing a nanny full time and sharing her with another family for part of the week. Nanny shares can be difficult to manage logistically – you need to find a family which is compatible with you. You can find out about nanny shares through nanny networks and websites such as Nanny Share.

Childcare for Older children

Your childcare needs will change over time to fit with your changing circumstances, different developmental stages of your children and other factors.

For older children, another option is au pairs. These are young women or men who come from overseas. As such, they are not usually trained to work with children and are not appropriate for very young children. They can work up to five hours a day and should be paid weekly, plus given their own room and meals. They must have two days off a week.

After school clubs and holiday playschemes are regulated by Ofsted and are offered by many schools. Most before and after school clubs cover from 8am to 6pm. Many provide children with breakfast or an afternoon snack. Costs vary for after school care and breakfast clubs. Holiday playschemes [covering sport, art, drama, etc] usually operate along school hours. There are also private holiday playschemes available. They can opt to be part of the Ofsted Childcare Register. Places are often scarce, depending on the area you live in, so it is worth applying early.

Disabled children: all childcare providers have to make ‘reasonable adjustments’ to provide for disabled children. For information on the best childcare for children with disabilities, click here.

Helping to pay for childcare

In addition to tax-free childcare and support for three and four year olds, there are other ways of cutting your childcare bill. Check with the tax credit calculator to see whether you are eligible for tax credits for childcare and how much you can claim. You cannot claims tax-free childcare and tax credits/Universal Credit. Tax credits are being rolled up into Universal Credit for new claimants, depending on where you live. You cannot claim tax credits and UC.

Tax credits include:

· Child tax credit
· Working families tax credit
· Childcare element of working families tax credit
· Disabled child’s premium.

As mentioned above, your employer may operate a childcare voucher scheme. These can be used for approved or registered childcare. However, vouchers may affect your entitlement to tax credits so check this out.

More information on keeping the cost of childcare down is available here.

With all childcare preparations, remember always to have an emergency back-up plan in case your child gets sick and cannot go to nursery or your child carer is ill or otherwise indisposed.

More information:

www.familyandchildcaretrust.org – for information on childcare
www.turn2us.org.uk – for information on financial support
Childcare support – for information on keeping childcare costs down

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