From groceries to utilities, many of our essential monthly outgoings seem to have increased. Sadly, childcare is no exception, with costs up by as much as 7.4% since 2023.
The Coram Childcare Survey 2024 revealed that the average cost of sending a child under two to nursery part-time was £158 a week. A further survey disclosed that one in five mothers stated that childcare costs equated to more than half of their household income, while 76% admitted that, financially, it no longer made sense for them to work.
Dan Whittaker, personal finance expert at Viva Money, shares 8 ways to save on childcare, including some alternative options to nursery. Dan's comments are shown below.
The Coram Childcare Survey 2024 revealed that the average cost of sending a child under two to nursery part-time was £158 a week. A further survey disclosed that one in five mothers stated that childcare costs equated to more than half of their household income, while 76% admitted that, financially, it no longer made sense for them to work.
Dan Whittaker, personal finance expert at Viva Money, shares 8 ways to save on childcare, including some alternative options to nursery. Dan's comments are shown below.
"For many families, increased childcare fees are a cause of financial stress," Dan says.
"Fortunately, there a number of schemes that may be able to offer support towards the costs. We’ve provided details of some, including how to check your eligibility for each. Before you get started, it may be worth checking out the childcare calculator on the Gov.uk website to look into any options that might be available to you."
1. Use The Tax-Free Childcare Scheme
"Tax-Free Childcare is a government-funded scheme that offers a 20% contribution towards childcare fees, up to £2,000 a year per child. If your child is disabled, you could get up to £4,000 a year."
"For every 80p you pay into your Tax-Free Childcare account, the government will top it up with a further 20p payment. You can claim tax-free childcare alongside the 15 and 30 free hours childcare provision if you are eligible. We’ll talk more about these schemes later."
"Applicable childcare costs include fees associated with nurseries, childminders, and even some holiday clubs, as long as they are approved by the scheme. A full list of approved providers can be found via the Gov.uk site."
"You can check your eligibility for the Tax-Free Childcare scheme here. If approved, setting up an account on the Gov.uk website should be straightforward."
"Once your account is active, you can either make a one-off payment or a series of regular payments, and can withdraw money to pay for approved providers as and when needed."
Dan adds, "Remember to re-confirm your details every three months to continue receiving Tax-Free Childcare payments. You should be sent a reminder to help you keep on top of this."
2. Claim 30 hours free childcare
"If your child is aged between 3 and 4 years old and not in school, you may be eligible to receive 30 hours free childcare a week, based on 38 weeks per year."
"Free hours can be redeemed with providers approved by the scheme, including nurseries and childminders. You can check if your chosen provider is registered on either the Ofsted website or this list of childminder agencies."
"You can check your eligibility here. Eligibility is based on a number of factors, including your employment status, income, and the age of your child."
"If you meet the criteria, you can go ahead and apply. It can take up to 7 days to find out if you have been accepted for the scheme."
"Once approved, you’ll be sent a voucher which you can use to claim your 30 free hours with the approved childcare provider of your choice."
3. Claim 15 hours free childcare
"Did you know that ALL children aged between 3 and 4 years old are entitled to 570 hours of free childcare per year? This is usually spread out across 15 hours per week, over 38 weeks."
"The good news is that you don’t need to apply for this scheme. All you need to do is provide proof of your child’s age to your chosen, approved childcare provider, and they will apply for the free hours on your behalf. Your local council will be able to provide you with further information on this scheme."
4. On Universal Credit? Claim Back Your Childcare Costs
"Are you currently receiving Universal Credit? If so, you may be able to claim back up to 85% of your childcare costs. If you qualify, the money will be sent to you in arrears, after you have paid your childcare provider. Remember to keep hold of the evidence of all payments made."
"The maximum amount of childcare costs you may be able to get back is £950.92 per month for one child. If you have two or more children, you could get back a maximum of £1,630.15"
"You can check your eligibility for Universal Credit here."
5. Be savvy with your days
"If you can be flexible with your working days, and your schedule allows it, you could think about keeping your child home on a Monday. If this is one of your child’s scheduled nursery days, you’re likely to end up paying for childcare on bank holiday Mondays, despite the fact that the nursery is closed. Over the course of 2024, this could mean up to 7 days of pre-paid childcare lost if you live in England or Wales, and up to 5 in Scotland."
Alternatives to sending your child to nursery
"If you’re worried about the cost of sending your child to nursery, there are a number of other options you could consider," Dan says.
6. Utilise Family & friends
"Do you have trusted family or friends who may be able to help you out with childcare duties? Having someone to look after your baby - if only for one day a week while you work - could make a big difference to the amount of money you spend on nursery fees."
"Studies have shown that almost two-thirds of grandparents look after their grandchildren on a regular basis. Of course, it’s important that both parties discuss expectations and set boundaries from the offset, so everyone knows where they stand with the arrangement."
"It’s also worth noting that, in some circumstances, grandparents and carers may be eligible to apply for Specified Adult Childcare credits. You can find out more and check your eligibility on the Gov.uk website."
7. Take some extra time off after maternity leave
"If you are employed in the UK, the maximum length of maternity leave is one year. You are within your rights to ask for some additional time off once this period has come to an end, although it’s important to remember that any further absence from work will not be classed as maternity leave, meaning any previous maternity rights no longer apply. It is at your employer’s discretion whether they approve any additional time off following maternity leave. You can also opt to add accrued holiday hours onto the end of your maternity leave. You still accrue your holiday allowance while on maternity leave."
"If you’re self-employed you may be able to apply for Maternity Allowance. You can check your eligibility here."
8. Have a think about your job options
"Leaving your job takes some serious thought and is not a decision that should be taken lightly".
"If keeping up with childcare costs is becoming difficult, but the thought of leaving your job makes you miserable, you should explore every alternative before handing your notice in. Your happiness and wellbeing matter. Reducing your hours may help strike a balance between saving money on childcare while still being able to go to work. Could you work from home a few days a week, or ask your boss for a pay rise?"
"On the other hand, becoming a full-time parent might feel like the next natural step in your family life, and you may be more than ready to hand your notice in and spend more time at home. If you choose this option, look into any sources of financial help you may be entitled to, such as benefits, or Marriage Allowance if you have a partner."
Dan’s final thoughts
"Going down the ‘conventional' route of sending a young child to nursery does not suit everyone,” Dan concludes. “For some families, the cost of childcare is just too much, whereas others would simply prefer to spend more time with their children. Whatever you choose to do, you should never feel pressurised into following a certain path just because everyone you know is doing it, or because it’s considered to be ‘the norm.’ The truth is, the norm can differ from family to family, and you must do what’s best for yours."
"Fortunately, there a number of schemes that may be able to offer support towards the costs. We’ve provided details of some, including how to check your eligibility for each. Before you get started, it may be worth checking out the childcare calculator on the Gov.uk website to look into any options that might be available to you."
1. Use The Tax-Free Childcare Scheme
"Tax-Free Childcare is a government-funded scheme that offers a 20% contribution towards childcare fees, up to £2,000 a year per child. If your child is disabled, you could get up to £4,000 a year."
"For every 80p you pay into your Tax-Free Childcare account, the government will top it up with a further 20p payment. You can claim tax-free childcare alongside the 15 and 30 free hours childcare provision if you are eligible. We’ll talk more about these schemes later."
"Applicable childcare costs include fees associated with nurseries, childminders, and even some holiday clubs, as long as they are approved by the scheme. A full list of approved providers can be found via the Gov.uk site."
"You can check your eligibility for the Tax-Free Childcare scheme here. If approved, setting up an account on the Gov.uk website should be straightforward."
"Once your account is active, you can either make a one-off payment or a series of regular payments, and can withdraw money to pay for approved providers as and when needed."
Dan adds, "Remember to re-confirm your details every three months to continue receiving Tax-Free Childcare payments. You should be sent a reminder to help you keep on top of this."
2. Claim 30 hours free childcare
"If your child is aged between 3 and 4 years old and not in school, you may be eligible to receive 30 hours free childcare a week, based on 38 weeks per year."
"Free hours can be redeemed with providers approved by the scheme, including nurseries and childminders. You can check if your chosen provider is registered on either the Ofsted website or this list of childminder agencies."
"You can check your eligibility here. Eligibility is based on a number of factors, including your employment status, income, and the age of your child."
"If you meet the criteria, you can go ahead and apply. It can take up to 7 days to find out if you have been accepted for the scheme."
"Once approved, you’ll be sent a voucher which you can use to claim your 30 free hours with the approved childcare provider of your choice."
3. Claim 15 hours free childcare
"Did you know that ALL children aged between 3 and 4 years old are entitled to 570 hours of free childcare per year? This is usually spread out across 15 hours per week, over 38 weeks."
"The good news is that you don’t need to apply for this scheme. All you need to do is provide proof of your child’s age to your chosen, approved childcare provider, and they will apply for the free hours on your behalf. Your local council will be able to provide you with further information on this scheme."
4. On Universal Credit? Claim Back Your Childcare Costs
"Are you currently receiving Universal Credit? If so, you may be able to claim back up to 85% of your childcare costs. If you qualify, the money will be sent to you in arrears, after you have paid your childcare provider. Remember to keep hold of the evidence of all payments made."
"The maximum amount of childcare costs you may be able to get back is £950.92 per month for one child. If you have two or more children, you could get back a maximum of £1,630.15"
"You can check your eligibility for Universal Credit here."
5. Be savvy with your days
"If you can be flexible with your working days, and your schedule allows it, you could think about keeping your child home on a Monday. If this is one of your child’s scheduled nursery days, you’re likely to end up paying for childcare on bank holiday Mondays, despite the fact that the nursery is closed. Over the course of 2024, this could mean up to 7 days of pre-paid childcare lost if you live in England or Wales, and up to 5 in Scotland."
Alternatives to sending your child to nursery
"If you’re worried about the cost of sending your child to nursery, there are a number of other options you could consider," Dan says.
6. Utilise Family & friends
"Do you have trusted family or friends who may be able to help you out with childcare duties? Having someone to look after your baby - if only for one day a week while you work - could make a big difference to the amount of money you spend on nursery fees."
"Studies have shown that almost two-thirds of grandparents look after their grandchildren on a regular basis. Of course, it’s important that both parties discuss expectations and set boundaries from the offset, so everyone knows where they stand with the arrangement."
"It’s also worth noting that, in some circumstances, grandparents and carers may be eligible to apply for Specified Adult Childcare credits. You can find out more and check your eligibility on the Gov.uk website."
7. Take some extra time off after maternity leave
"If you are employed in the UK, the maximum length of maternity leave is one year. You are within your rights to ask for some additional time off once this period has come to an end, although it’s important to remember that any further absence from work will not be classed as maternity leave, meaning any previous maternity rights no longer apply. It is at your employer’s discretion whether they approve any additional time off following maternity leave. You can also opt to add accrued holiday hours onto the end of your maternity leave. You still accrue your holiday allowance while on maternity leave."
"If you’re self-employed you may be able to apply for Maternity Allowance. You can check your eligibility here."
8. Have a think about your job options
"Leaving your job takes some serious thought and is not a decision that should be taken lightly".
"If keeping up with childcare costs is becoming difficult, but the thought of leaving your job makes you miserable, you should explore every alternative before handing your notice in. Your happiness and wellbeing matter. Reducing your hours may help strike a balance between saving money on childcare while still being able to go to work. Could you work from home a few days a week, or ask your boss for a pay rise?"
"On the other hand, becoming a full-time parent might feel like the next natural step in your family life, and you may be more than ready to hand your notice in and spend more time at home. If you choose this option, look into any sources of financial help you may be entitled to, such as benefits, or Marriage Allowance if you have a partner."
Dan’s final thoughts
"Going down the ‘conventional' route of sending a young child to nursery does not suit everyone,” Dan concludes. “For some families, the cost of childcare is just too much, whereas others would simply prefer to spend more time with their children. Whatever you choose to do, you should never feel pressurised into following a certain path just because everyone you know is doing it, or because it’s considered to be ‘the norm.’ The truth is, the norm can differ from family to family, and you must do what’s best for yours."
-ENDS-
About Viva Money
Viva Money is not a lender but is a fully regulated and authorised credit broker. Viva Money is a registered Trading Name of Digitonomy Limited, Registered in England and Wales (Company number 08385135), Registered Office; Steam Mill Business Centre, Steam Mill Street, Chester, Cheshire, CH3 5AN. Digitonomy Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference number: 690249. Licenced by the Information Commissioners Office, (registration number ZA007309)
Website: https://vivamoney.co.uk/
Dan Whittaker - Personal Finance Expert at Viva Money
Dan has worked in the consumer finance sector for over a decade in a number of roles, including developing and maintaining commercial partnerships, marketing, and digital development.
Dan has strong market and product knowledge across a range of consumer finance products including, but not limited to, credit cards, savings, loans, and mortgages.
Viva Money is not a lender but is a fully regulated and authorised credit broker. Viva Money is a registered Trading Name of Digitonomy Limited, Registered in England and Wales (Company number 08385135), Registered Office; Steam Mill Business Centre, Steam Mill Street, Chester, Cheshire, CH3 5AN. Digitonomy Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference number: 690249. Licenced by the Information Commissioners Office, (registration number ZA007309)
Website: https://vivamoney.co.uk/
Dan Whittaker - Personal Finance Expert at Viva Money
Dan has worked in the consumer finance sector for over a decade in a number of roles, including developing and maintaining commercial partnerships, marketing, and digital development.
Dan has strong market and product knowledge across a range of consumer finance products including, but not limited to, credit cards, savings, loans, and mortgages.