How to save money on childcare: Six ways to reduce costs

When the cost of living crisis is affecting millions of people, parents are looking for ways to save money on childcare, often one of the biggest fixed costs.

Parents pay 2.5 percent more for childcare than last year, with a part-time daycare costing as much as £ 7,000, while full-time childcare can set back a staggering £ 11,000 a year, research shows.

At the same time, single-parent households are expected to be hit hardest by the cost-of-living crisis, with a third saying they have been forced to cut back or go without food or heating to afford rising costs.

Single parents are worried about the cost of living crisis, as a third have said they have been forced to skip meals or refrain from heating to afford everyday things

In fact, 95 percent of single parents have been worried about the rising cost of necessities over the past 12 months, compared to 57 percent of all adults as a whole, according to research conducted by Savanta ComRes on behalf of Gingerbread.

Single parents were also found to be twice as likely to feel depressed due to money worries, with more than half of single parents seeing their financial situation deteriorate, while two in five expect things to be even worse worse in the coming year.

As? has rounded up a number of ways to help reduce the cost of childcare and relieve stress for working, single or struggling parents.

Although the best options for saving money depend on personal circumstances, there is state and local support available for those who may be having difficulty.

Working parents can claim tax-free childcare

Tax-free childcare is a government system that pays working parents a supplement based on their childcare costs.

You can get up to £ 2,000 per child and year in quarterly installments. If you have a disabled child, you can receive up to £ 4,000 per child – up to £ 1,000 every three months.

You, and any partner, must be over 16 and each expects to earn at least £ 152 per week – equal to 16 hours on the national minimum or living wage.

If you or your partner are on maternity, paternity or adoption leave, or if you are unable to work because you are disabled or have care responsibilities, you may also still be eligible.

Unfortunately, you can not get tax-free childcare if either you or your partner individually expect to earn £ 100,000 or more.

2. Check if you are entitled to a tax deduction or universal credit

Both Working Tax Credit and Universal Credit offer extra support for families, where the government gives the recipient extra money to pay for childcare.

To qualify for Working Tax Credit, the claimant and their partner must both work at least 16 hours a week.

A person may be out of work if they are entitled to childcare allowance, in prison, in a hospital or incapacitated for work.

It is possible to save up to 70% of the childcare costs, up to a maximum of GBP 175 per week for one child, or GBP 300 for two or more children.

Similarly, Universal Credit claimants can have 85% of their childcare costs covered, up to a maximum of £ 646 a month for one child, or £ 1,108 for two or more children.

Take advantage of free babysitting time

In England, there are systems for parents with very young children.

The “free childcare for two-year-olds” system is for those who receive certain benefits. In addition, everyone is entitled to 15 hours of free childcare per week for children aged three or four.

This is for 38 weeks per year, but parents can choose to take fewer hours to spread this over more weeks.

Those on lower incomes may be able to claim 30 hours of free childcare a week, as long as they and their partners earn at least the national minimum wage or living wage.

In Scotland, all three- and four-year-olds are entitled to about 30 hours of free childcare per year. There is also a two-year-old system for those who have certain allowances and low incomes.

In Wales, all three- and four-year-olds can receive 30 hours of free childcare a week. The 30 hours consist of a minimum of 10 hours of preschool instruction per week and a maximum of 20 hours of childcare per week.

In Northern Ireland, three- and four-year-olds receive 12 and a half hours of free childcare per week during term time through a funded pre-school place.

Parents are worried about paying for childcare, as a part-time daycare place for a child costs as much as £ 7,000 per year

Parents are worried about paying for childcare, as a part-time daycare place for a child costs as much as £ 7,000 per year

4. Do not forget the child allowance

Even if it is not childcare specific, child support from the state can help alleviate the cost of childcare.

For the tax year 2022-23, parents can claim £ 21.80 for their first child and an additional £ 14.45 a week for any additional children.

Parents will receive child allowance until their child reaches the age of 16 – or until they turn 21 if they have an approved form of education.

It is worth noting that the child allowance has not been means-tested. But if a parent earns more than £ 50,000 a year, they will levy a tax on the money received.

If they earn more than £ 60,000 a year, they must repay all benefits received.

Despite that, which one? suggests that it is worth registering and only opting out of payments, as parents will receive Social Security credits while they are free.

Engage grandparents or try to share parents

Grandparents are often the first point of contact to help with childcare, although many are unaware that they may qualify for benefits as a result.

For grandparents who are not already retired and who care for a child under the age of 12, can qualify for Social Security credits, and time spent nursing is counted for their state pension entitlement.

Another option is to share your childcare information with a friend or co-parent.

For parents with friends who have similar schedules and childcare needs, a cheaper or free childcare option is to consider taking care of each other’s children.

While this erases the benefits of professional childcare, it can also allow children to socialize with others and can save both thousands of pounds a year.

Local charities and child care foundations can offer a number of free or affordable activities to keep children happy and support parents who are worried about rising costs.

Local charities and child care foundations can offer a number of free or affordable activities to keep children happy and support parents who are worried about rising costs.

Find cheap activities with local charities

Many municipalities offer free events and activities during school holidays, so it is worth checking out the relevant websites.

Organizations like the YMCA, local church groups, or local government play programs can be great places to look for free leisure clubs and classes.

These are for parents who can not pick up their children after school, which can save a lot of money compared to a babysitter or babysitter.

However, the services can be limited to serving only certain schools in the immediate area.

You can also talk to your child’s school to see what options they could give you to help you and your child.

School-based clubs or hobbies can be a great way to help your child develop a lifelong interest or skills, as well as their social skills, but they can also offer you a few extra hours each week of childcare.

Reena Sewraz, which one? Money expert, said: “The cost of living crisis puts a huge strain on households’ finances, with millions of families struggling to make ends meet.

“Childcare is a necessity for working parents but can be extremely expensive. In many cases, it is one of the biggest financial commitments after housing costs, so it is extremely worrying that many are struggling to pay for it.

“There are a number of systems available from the government to help alleviate some of the costs of childcare. However, these will not be an option for everyone.

“There are also alternative ways to save money, such as sharing parents or asking family members to help, while local charities and councils can also offer free leisure clubs and classes.”

Some links in this article may be affiliate links. If you click on them, we can earn a small commission. It helps us fund This Is Money and keep it free to use. We do not write articles to market products. We do not allow any commercial relationship to affect our editorial independence.

Leave a Reply