Today my youngest daughter Chloe started pre-school. Ever since my work has increased in the day with Skint Dad and other freelance work, we have been looking for a childcare provider which we can let her go for a few hours in the week – not only for her enjoyment to play with children her own age, but also to give me a chance to complete work as it’s difficult with a 2 year old bouncing on you!
We’ve checked out local nurseries, childminders and babysitters but each time we thought we’d found the ideal place but something happened or cropped up that put us off. The biggest factor for not putting her somewhere before now was cost. Also, if I’m honest, I quite like being with her all the time. It’s so nice in the day when she get a little sleepy and comes and cuddles up. I really cherish the time we are having together and the thought of her going to pre-school makes me a little sad.
Anyway, when I was working in London we had her in a nursery that was costing an absolute fortune and we didn’t want to be in the same position. Let’s face it, childcare is so expensive nowadays that it can actually cost more than your rent or mortgage!
I know from experience that it was costing us over £1,100 per month for Chloe to go to a full time nursery and for Daniella to attend after school club. And as much as I enjoyed my job, I just couldn’t afford it – especially with the commuting fees to London on top.
After starting our search again a few weeks ago, we finally found a term time pre-school which is affordable, close by and accommodating for our needs. We’ve only put her in for 3 hours a week and we will increase this as my work (hopefully) increases.
Chloe was 2 in January and although our local council did offer 15 hours free childcare for 2 yr olds, because we aren’t in receipt of certain benefits we didn’t qualify. This meant that we will have to wait until next Easter when she will be eligible for 15 hours free childcare for 38 weeks of the year. I don’t want to wish the time away but this will be really helpful with our finances. However, if you’re thinking that as soon as your child turns 3 they qualify for the 15 hours then you’d be wrong.
Depending on when your child’s 3rd birthday falls will ultimately decide at which point they will qualify for the free 15 hours. Below is a chart which shows you when that is.
As you can see if, like Chloe, your child’s birthday is in January, you’re going to have to wait until the after the Easter school holidays before you qualify for free childcare, which means for four months into their 3rd birthday you will still need to cover the full cost.
If like a lot of families you need to place your children into childcare but don’t get the free entitlement, there are a number of options to consider which may be more cost effective, depending on what type of childcare you need.
Registered Childminders are a really good choice if you are looking for flexibility. They are registered to look after up to six children under the age of 8 in their own home including their own children. This type is childcare provider can cost anywhere from £70 to £130 per week for 25 hours care depending what part of the country you live in.
Day Nursery are a childcare provider who take children from 6 weeks old to 5. They are normally open from 8am – 6pm all year round. This type of childcare is what we used to use for Chloe and it was quite an expensive option, costing us just over £200 per week. As the child turns 3 they will qualify for 15 hours free childcare which is a great help (see above).
If you’ve got the room, and don’t require a full time childcare provider, then an Au Pair is a cost effective option. They will live with you as the host family and while helping around the home and with the children, they will get to learn about local culture and language. Au Pairs can cost up to £90 per week plus you would need provide accommodation and board.
Friends or Family
If you’re lucky to have parents that are retired (and have free time) or perhaps friends with children who work opposite hours to you then this can be a cost free solution for childcare. I know of a few people who are lucky enough to have this option and it is a win-win situation. The grandparents want nothing more than to spend time with their grandchildren and friends who you can swap and share childcare are obviously in the same mind as you.
If the childcare provider you use is Ofsted registered (if you don’t know, just ask), and your employer offers a scheme, you can get up to £243 of childcare tax free per month if you’re a basic rate tax payer or £124 per month for higher rate tax payers.
You simply request how much you need from your employer and they deduct it from your salary before tax. You then get vouchers, or electronic vouchers, that you can use to pay your childcare provider.
Most providers accept them and you can use them for all sorts of things like the obvious childcare such as nurseries and pre-school but you can also use them for breakfast clubs, school clubs and holiday clubs.
You don’t have to claim every month and need to inform your payroll team to stop the payment if you don’t require it (like over the summer holidays, for instance).
Also, if both parents are working, you can both claim – making your tax free amount up to £486 per month!
From the Autumn 2015, the government are proposing to introduce a new tax incentive for working parents so you’ll be able to get tax savings of up to £2,000 per eligible child a year!
Child Tax Credits & Working Tax Credits
You may be eligible to claim for child tax credits and working tax credits, depending on how much you earn, the amount of hours you work, how many children you have and whether you are paying for eligible childcare.
MoneySavingExpert reckon the average tax credit payout is £60 which would be a massive help to any family. You can check if you qualify for tax credits on the HMRC website here.
However, if you claim childcare vouchers from your employer, it may effect the amount of entitlement you get for tax credits. Depending on your own circumstances, you may find it better for you to claim one and not the other. It’s all a bit baffling but, HMRC have put together a childcare calculator to help you work out what’s best for you.
Over to you
Whatever option you decide, you need to find that balance which I know is becoming increasingly difficult with rising prices on every corner. Once you decide what option fits best for your situation then check if you are entitled to any financial help with your childcare provider.
I have given a few options and solutions but I am sure there are quite a few more. In the comments below I would really appreciate it if you would add your suggestion to reduce childcare provider costs.
Ricky Willis is the original Skint Dad. A money-making enthusiast, father, and husband to Naomi. He is always looking for unique ways to earn a little extra.