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Figures from the Family and Childcare Trust  show that average childcare costs for a child under two increased by 20% between 2011 and 2016, a period in which wages grew by just 7.3%.


Findings also show the cost of sending a child under two to nursery part-time (25 hours) now stands at a hefty £115.45 per week – or £6,003 per year.


In London, costs can be higher still, with around a third of parents’ income often going on care for little ones.


With costs rocketing, more and more families are looking at other options.


Here we set out some of the different routes you could consider – along with other tips to help you keep costs down.



Childcare voucher scheme

Many large workplaces offer a childcare voucher scheme, enabling you to pay for childcare out of your pre-tax salary via “salary sacrifice.”


As you’re purchasing the vouchers with your pre-tax salary, you don’t need to pay tax or National Insurance, thereby saving your money. You can spend the vouchers on all sorts of childcare, including nurseries, after-school clubs and some nannies.


That said, while vouchers can be a tax-efficient way of paying for childcare, this will depend on individual circumstances and how much you are earning.


For more information visit and


It’s also worth noting that a new “tax-free childcare” scheme is due to be rolled out this year in addition to the existing childcare vouchers scheme. This will be available to parents who work more than 16 hours a week (including self-employed workers). Each parent must not earn more than £100,000 a year.


The scheme will be available to all eligible parents by the end of the year and will subsidise childcare costs by around 20%.



Free early education

All three and four-year-olds in England are entitled to 570 hours of free early education per year. That equates to 15 hours per week. Some two-year-olds also have an entitlement (if parents are on a low income).This year, the free childcare entitlement is set to double to 30 hours per week.


For more information visit



Talk to your employer

Don’t be afraid of talking to your employer about flexible working, as all requests must be given consideration:


  • ask about changing the hours you work, and also look into compressed hours (where you work full-time hours but over fewer days).
  • see if you can work some or all of your hours from home.
  • look into the possibility of a job share. This is where two people do one job and split the hours.



Claim all the help you are entitled to

If you are looking to keep costs down, it is well worth checking you are claiming all the help and benefits you are entitled to, such as child benefit, child tax credit and income support.

Useful resources include and


Child Benefit

Child Benefit is available to parents of children under 16 (or 20 if still in education).This tax-free benefit is available unless one of you has income of £50,009 or more. This is paid at £20.70 a week for your oldest child and £13.70 for other children.



Child Tax Credit

This “Childcare element of Working Tax Credits” is another benefit which helps with the cost of raising child.


Working out your entitlement to this benefit can be very complicated, as the amount you get depends on a range of factors, including your childcare costs, the number of children you have, the number of hours your work per week, your income, and whether your child has disabilities.


But it could be well worth checking your entitlement, as many families get more than £3,000 per year.

You can also claim Child Tax Credit even if you’re not working.

To find out more, visit



Income Support

If you are a single parent of a child under five, you may also be able to claim Income Support.


For more information visit



Organise a childcare “swap”

This is where you share duties with a friend whose working hours complement yours. With this set-up, you look after your friend’s children while they are at work, and they return the favour when you are at work.


You need to make sure you both agree on hours and schedules at the outset. It’s also important to have a plan in place for illness – and taking holidays.


Equally, if there are a few parents in a similar situation, you could all band together and share the load by taking it in turns to look after the children.



Consider a nanny

If you have two or more children, it can actually work out cheaper to have a nanny – rather than put them in nursery or with a childminder.


Nannies charge by the hour, irrespective of the number of children – whereas nurseries and childminders charge per child.


But remember, that when employing a nanny, you take on an employer’s responsibility, which means tax and National Insurance – and potentially a pension too.



Arrange a nanny-share

Better still, why not sign up to a nanny-share, as this could mean substantial savings compared to a full-time sole nanny.


If your friends are in the same scenario as you, you could share your Mary Poppins with them.


Alternatively, if you don’t already have a family to share with, useful resources include listings site,, and recently-launched, This matches families for nanny share using software which takes into account a range of factors including location, number of children, time and dates and childcare preferences. also takes care of the administration of the nanny-share for you, including contracts, payroll and payments.



Think about an au pair

If you have a spare room and are happy to have someone living with you, you might want to think about employing an au pair to provide help with both the children and the housework. As you are providing free food and accommodation, this can be more affordable than other childcare options.


For more information visit the British Au Pair Agencies Association at



Get help from grandparents and other family members

When it comes to managing childcare costs, there are big savings to be made by getting as much help as you can from friends and family.


Around seven million grandparents provide care for grandchildren, according to charity, Grandparents Plus, while figures from insurer, Rias, found that grandparents spend an average of nine hours a week looking after grandchildren, saving parents almost £2,000 a year in childcare fees.


But if you do decide to enlist help grandparents – or other family members – you need to ensure they are happy with the arrangement, and comfortable with the demands being placed upon them.


What is Money Means?

Money Means is a news and information series written by independent financial and consumer journalists and experts*. FSCS launched Money Means in 2016 to help give people clear and useful information about personal finance, to increase their understanding and confidence when dealing with money.



9/8/2017 2:31:41 PM