Help with childcare costs

Whether your child goes to a nursery, a childminder or somewhere else, most childcare options will come at a cost. Here are some ways in which you can get government support to help pay for your childcare.

Tax-free childcare

Tax-free childcare can give you up to £2,000 per child, per year, towards childcare costs (£4,000 for disabled children). It works by topping up the money that you pay into an online account, to give you extra to spend on childcare providers including day nurseries, registered childminders and nannies. The government gives you an extra £2 for every £8 you put in. So for example, if you put £800 into your account, you would get a top up of £200, giving you £1,000 to spend on childcare.

To help you decide how much money you would need to pay into your account, it might help to first work out what your average childcare costs would be.

15 hours free childcare

All parents of children aged between three and four years old in England are entitled to 15 hours of free childcare per week for 38 weeks of the year. You can divide this time between one or more approved childcare providers including:

  • daycare centres, such as nurseries;
  • childminders;
  • playgroups;
  • Sure Start Children’s Centres;
  • schools; and
  • after school clubs.

If you’re receiving certain benefits, you may also be able to claim 15 hours of free childcare for children as young as two years old.

30 hours free childcare

In England, if you meet certain eligibility criteria, you may be entitled to an additional 15 hours of free childcare for three and four year olds, totalling 30 hours per week. This is valid for 38 weeks of the year.

In Scotland, all parents of three and four year olds are able to apply for up to 30 hours of free childcare per week during term-time. If you’re in receipt of certain benefits, you can also claim up to 30 hours for children as young as two.

In Wales, all parents of three and four year olds can claim up to 30 hours of free childcare per week for up to 48 weeks of the year. Some parents may be entitled to 12.5 hours of free childcare per week for children as young as two as part of the Flying Start scheme. However, this is only available in certain parts of the country so you’ll need to contact your local authority to see if your area is covered.

There’s currently no free childcare scheme available in Northern Ireland, so you may want to look into other forms of financial support such as tax-free childcare or Universal Credit.

Changes to free childcare

From April 2024, the government is expanding free childcare in England. The changes are being made to make it so most working families with children under the age of five will be entitled to 30 hours of free childcare. The plan is to introduce new measures in three stages, outlined below:

  • from April 2024 - eligible parents of two year olds will get access to 15 hours of free childcare per week.
  • From September 2024 - 15 hours free childcare will be extended to parents of children between nine months and three years old.
  • From September 2025 - eligible parents of children under the age of five can get 30 hours of free childcare per week.

Universal Credit for childcare

If you’re claiming Universal Credit, you may be able to claim up to 85% of your childcare costs back. You can claim up to £950.92 for one child under the age of 17 or up to £1,630.15 for two or more children under the age of 17. To qualify you and any partner you have must be working or about to start work. In certain circumstances, if you’re struggling to pay for childcare, you may be able to claim these costs upfront by filling in some extra forms.

Help with childcare while you’re studying

If you’re in full-time education, you could get additional support with childcare depending on your age and where you’re studying.

If you’re under 20 years of age, and attending school or sixth form, you may be eligible for weekly payments through the Care to Learn scheme. You can get up to £180 per child, per week if you live outside London or up to £195 per child, per week, if you live in London.

You can apply for Discretionary Learner Support through your college if you’re in further education to help with a number of costs you may be facing, including childcare. The amount you receive is decided by your learning provider and is available to eligible students aged 19 and over. However, for help with childcare costs in particular, you must be at least 20 years old.

If you’re in full-time higher education and have children under the age of 15, or children under 17 with special education needs, you may be eligible for a Childcare Grant. If eligible, you’ll get the lower of 85% of your childcare costs, or a maximum amount of £188.90 per week for one child, and £325.85 per week for two or more children.

Before you apply for any of these schemes it can be helpful to work out which of the childcare options available will fit with your personal circumstances. It’s also important to remember some childcare providers may not be eligible for certain forms of support.

Find out more on The Pension Confident Podcast

Wondering how raising children impacts your personal finances? Listen to episode 19 of The Pension Confident Podcast and hear from our guests as they discuss wills, life insurance, pension beneficiaries and more. You can also watch the episode on YouTube or read the full transcript.

If you’re interested in learning more about looking after family members, what to do when expecting a baby, or family problems like illness, divorce or bereavement, head to our Family and Care section.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Last edited: 06-04-2024

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