Money Expert Breaks Down NEW Government Childcare Perks & Six Smart Savings Tips for Parents
New data from Coram’s Annual Childcare Survey has revealed that the average cost of a part-time childcare place for a child under two in Great Britain has jumped to £7,569 per year – a 7.4% increase from 2023. This sharp rise is putting a serious strain on family finances, making it harder for parents to cover other essentials amid the current cost of living crisis.
Fiona Peake, Personal Finance Expert at Ocean Finance, explains how the new government scheme can ease some of this financial pressure and offers six practical tips for parents looking to save money.
“The latest government changes to childcare support are a real lifeline for parents, but not everyone knows how to take advantage of the benefits. From September, eligible working parents in England can get up to 30 hours of free childcare a week—adding up to 1,140 hours a year. If your childcare provider is flexible, you might even be able to spread those hours across the whole year.
To qualify, your child needs to live with you, and you (and your partner, if you have one) must meet some basic criteria: you’ll need a National Insurance number, earn at least £183 per week (or a bit less if you’re under 21), and have an income under £100,000. You’ll also need British or Irish citizenship, settled or pre-settled status, or permission to access public funds.
The scheme is being rolled out gradually for younger children. Currently, you can claim 15 hours a week for 2 to 3-year-olds and 30 hours for 3 to 4-year-olds. From September 2024, parents of children aged nine months to 2 years can also claim 15 hours, and by September 2025, all children from nine months to 4 years will be eligible for 30 hours a week.
You can apply for the scheme online and find more details on the government website.”
How about if you’re not eligible?
“If you don’t qualify as a working parent—there’s still help available. The Tax-Free Childcare scheme gives you an extra £2 for every £8 you put into your childcare account, up to £2,000 a year per child (or £4,000 if your child is disabled). If you’re on Universal Credit, you can claim back up to 85% of your childcare costs each month, which is a huge help for many families.
The Free Early Education Entitlement Scheme (FEEE) offers 570 hours of free childcare each year, which works out to about 15 hours a week during term time. This is available for all three- and four-year-olds, as well as two-year-olds if you’re on certain benefits. It’s definitely worth checking with your local council or your childcare provider to see what you might be eligible for—it could make a big difference!”
Six Tips for Cutting Childcare Costs
- Claim All Entitled Benefits: “Beyond childcare-specific support, many families are eligible for other financial aid, including Child Benefit and Working Tax Credit. Regularly reviewing your entitlements, especially as your income or family situation changes, ensures you’re not missing out on money that could help ease the financial strain.”
- Shop Second-Hand: “For items like clothes, toys, and baby equipment that kids outgrow quickly, buying new can be unnecessarily expensive. Consider buying second-hand through online marketplaces like Facebook Marketplace, eBay, or Vinted. Organising swaps with local parents for clothes, books, and toys is another great way to get what you need without spending a penny.”
- Shop Smart for School Supplies: “The back-to-school period can be expensive, but there are ways to cut costs. Start by making an inventory of what you already have at home to avoid buying duplicates. For uniforms, consider generic items that match your school’s dress code rather than pricier branded versions. Look out for sales and discounts on stationery and supplies, and buy in bulk for better value.”
- Plan Meals in Advance: “Meal planning is one of the simplest ways to control your family’s grocery spending. By planning your meals weekly, you can create a shopping list that helps avoid impulse buys and cuts down on food waste.”
- Free Family Entertainment: “Keeping kids entertained doesn’t have to break the bank. Local libraries, parks, and community centres often offer free events or low-cost activities. Many museums and galleries also offer free entry for children. Planning ahead and getting creative can provide just as much fun without the hefty price tag.”
- Consider a Personal Loan: “If you need help covering upfront childcare expenses, like deposits or advance payments, a personal loan could be a handy option. It can provide the immediate funds you need, allowing you to pay back with manageable monthly payments. Just be sure not to borrow more than necessary and budget carefully to stay on top of repayments.”
