One in four workers have cut their hours as a result of sky-high childcare costs. But reducing costs for working parents is easier than you might think.
Childcare in the UK is laughably expensive, with the latest figures showing that working couples with young children now spend a third of their income on nurseries and childminders.
This means forking out an average of £11,300 a year on childcare – rising to £15,700 in London.
Hardly surprising then, that more than a quarter of workers have been forced to cut their hours as a result of these prohibitive costs, according to the British Chambers of Commerce.
The business group is calling on the Government to change its policy to help as many parents as possible stay in the workplace.
But rather than waiting for the Government to finally act, there are steps you can take to dramatically reduce the cost of childcare – and give you more flexibility over the hours you want to work.
Check if your employer offers childcare vouchers
In the UK, you can get tax-free vouchers to pay for childcare with a registered provider, which are worth up to a maximum of £55 a week.
It usually means giving up a portion of your salary, and being paid in vouchers instead without the tax being deducted.
If, for example, you were to give up £1,000 worth of pay over the course of a year, this would usually be worth around £700 after tax. However, in vouchers you get the full £1,000.
Remember vouchers aren’t just for tiny kids
Childcare vouchers can be used to pay for nurseries and childminders, but can also pay for care for older children – up until the first September after their 15th birthday.
They may not be desperately keen on the idea of going to a childminder after school in their teens, but some holiday camps can be paid for using vouchers, so it’s worth investigating whether it could solve your holiday headaches.
If they don’t offer vouchers
You can still get tax-free childcare even if your employer doesn’t offer vouchers, or if you work for yourself.
Unfortunately, you’ll have to wait for it, as the scheme only starts being rolled out in early 2017.
The idea is that you contribute to an online childcare account, and for every 80p you put in, the government pays 20p - up to £2,000 for each child each year.
Take advantage of free childcare for three- and four-year olds
At the moment in England, you can get 15 free hours of care a week for 38 weeks of the year, at a huge range of nurseries and childminders.
This is set to rise to 30 hours for some people in 2017. It means you may be able to get some of the care you are paying for free of charge.
Check if you can get free care for 2-year olds
Children of families on lower incomes, and those on some benefits, may qualify for this free care from the age of two.
Around 40% of all two-year-olds qualify, so it’s worth checking before ruling yourself out.
Look into childcare tax credits
If you qualify for working tax credits, you may be able to get an extra payment to cover up to 70% of the cost of childcare.
Those on Universal Credit can get up to 85% of their childcare costs paid for.
Of course everyone wants the very best for their child, but everyone also likes to eat and pay the mortgage, so it’s worth being a bit flexible!
Don’t just look at the most popular nurseries; hunt around, ask for prices, and see who offers the best value for money.
Your hunt should start far earlier than you think - well before your child needs care.
Often the best cost-effective nurseries get snapped up fast, so you should have your child on a waiting list at least a year in advance – and possibly longer.
Consider all the extras
Some nurseries insist on a uniform, feeding the kids an expensive organic hot meal at lunchtime and taking them on pricey educational trips.
If you’re happy to pay for all this, great. If not, you could consider somewhere that lets you dress them in comfortable clothes and take a packed lunch of your choice.
Don’t forget to check what they charge if you run late for pick up too.
Ask about a discount
Nurseries may offer discounts. The most common kind of reduction is if you send more than one child – which could mean 10% off the fees.
Also check if your employer has a discounted deal with any nurseries, as this could make them a more affordable option.
Consider a community nursery
These tend to be much cheaper than private nurseries, and are not-for-profit organisations.
They usually expect some parental involvement, including things like fundraising, while your child is part of the community.
Think about location
Some locations are far pricier than others for childcare. In some extreme cases it’s actually worth moving to make the maths work.
Obviously you’ll need consider your commute: is there anywhere between work and home that could offer cost-effective solutions?
Consider a nanny share
Often parents with a nanny are looking for a way to share the cost, and socialise their offspring, so they are open to sharing.
They continue to employ the nanny, and possibly house them, so you just pay a contribution.
There are a number of websites where shares are advertised, including nannyshare.co.uk, so you can find someone local to share with.
Try a nanny with a built-in share
You could employ a nanny who brings their own child to work.
They will charge a lower rate, because they don’t have to pay for care themselves, and you have more stability than a nanny share – where circumstances can change and you have to start looking for a nanny all over again.
Don’t forget childminders
They are often one of the cheapest options, and they are Ofsted-registered, so you can pay for care in vouchers.
Many will do also do a dedicated drop off and pick up for specific schools, which make them a great option for school age children.
Look into the cost of an au pair
This is often the cheapest answer, frankly because they are often teenagers in the country to learn the language and, instead of being paid, you are providing board and pocket money.
They must be paid at least £60 a week for 25 hours’ work and two evenings of babysitting.
Don’t forget, however, that given their age, you need to be clear about how much responsibility you are happy with them shouldering.
Consider a summer au-pair
You may have a perfectly functional plan for term-time, but that falls apart during the summer holidays.
If that’s the case, there are plenty of teens looking to spend a summer overseas learning English, so for the cost of bed, board and pocket money, you can have someone on hand to look after the kids for the six weeks of the summer holidays.
Ask to work from home
Not all parents can be hugely productive working from home while simultaneously looking after their children, so while this is a solution in itself for some people, it’s only part of the solution for others.
If you are at home, for example, then you may be happy employing an au pair or a childcare student - knowing you are on hand if anything goes awry.
Arrange a parent share
It doesn’t work for everyone, but if you can find someone with a child around the same age, a similar approach to parenting, and the same need for affordable childcare, you can consider looking after each other’s children.
If you take them for one day each, you get two days of childcare for the price of one day off work.
Start a babysitting group
Even if you can’t sort a parent share for childcare while you’re at work, you can at least use it to get free babysitting.
This usually works if you use tokens rather than arranging a direct trade, so you babysit for someone else in return for a token, and can then spend that token getting someone else in the group to babysit for you.
Introduce bartering to your babysitting group
Some families find it difficult to swap babysitting – especially in single parent families or where parents work shifts, because there’s no spare parent to watch their own kids.
In cases like this, ask if you can swap your skills instead. In some cases you could trade a meal for babysitting, or help tutoring older children from home.
Go to the gym
Gyms offer a wide variety of solutions - from regular after-school classes to holiday clubs and creches.
In many cases, if the kids join (for as little as £10 a month), all these things are free.
You don’t have to spend the time working out either, so if you have the freedom to work from the gym café, you can get incredibly cheap childcare.
Consider charitable options
You may not feel in need of charity, but there are plenty of organisations that can help.
They may run free clubs and classes after school, or offer solutions for holiday care though a local authority playscheme, the church or the YMCA.
Talk to grandparents
In many cases, the generosity of grandparents makes all the difference to the family finances, if they take on childcare for a couple of hours a day or one or two days a week.
It may also work in their favour if they are caring for a child under 12 and don’t have enough years of NI payments to qualify for the full state pension.
They may get Class 3 NI credits on the basis that they are a carer - which will count towards their qualifying years.
Haggle with grandparents
Not all grandparents want to help out every week, and not all of them live locally enough to make it work. However, this doesn’t necessary mean they are off the hook.
They can always come to visit during school holidays, for a week of quality time looking after the grandchildren - or the children can go to visit them, saving you paying for a week of care.
Juggle work with your partner
In many cases, juggling care between parents becomes an option. Parents may be able to work opposite shifts, or change their days, so the number of hours of care they need to pay for is dramatically reduced.
Of course, this means you will see far less of one another in the early years - which can be particularly tough - but it might be the best way to make ends meet.
Check working patterns with your employer
Not all employers are wedded to the 9-5, so talk to your employer about any flexibility they may offer. Some will allow term-time working - so you have the school holidays off.
Others will allow compressed hours, so you may work longer hours for four days a week.
Some even offer school hours flexibility, so you work 9-3, spend time with your family after school, and then log back on to work from home 8-10.
Consider school hours
Some schools have longer working days than others, and some academies operate until 6pm.
This is a contentious subject, but if you are happy that your child is old enough to cope with a longer day, that the day itself isn’t too arduous, and that you could both benefit from the extra hours, then it’s definitely something to consider.
Finally, ask everyone
Whatever your childcare headache, you won’t be the first one to have had it.
You are surrounded by other parents who have been through exactly the same thing, so ask them what they do.
They may come up with a solution you haven’t considered; they may know a brilliant and inexpensive nursery; or they might even be willing to do a childcare exchange with you.
The only way you’ll know is if you ask.
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