Ways to Fund your childcare in 2017

October 10, 2016

You may know the government has announced two major changes in the ways it will support parents with registered or approved childcare costs in the future. The changes will now come in during 2017.

Autumn 2017, the government are set to increase the amount of funding hours from 15 to 30 per week for all eligible 3&4-year-old children, allowing them to attend funded places in participating Pre-schools to get them school ready. The guidelines and criteria on implementing this change has not yet been finalised, it is anticipated childcare providers may not be informed until late spring 2017.

However, you can start making savings now . . .

Starting in early 2017, the government plans to phase in a new voucher scheme called the Tax-free Childcare Scheme (TFC).  This will be a UK-wide scheme and to be eligible for the Tax-free Childcare Scheme, you must be working and if you have a partner they must work too, unless they are unable to work because they are disabled or care for a disabled person. You must not be receiving support through Tax Credits or where either a single parent or either member of a couple earns over £100,000.

The scheme will cover parents of children under twelve or sixteen for disabled children. Unlike the current voucher system (CCV), it doesn’t rely on your employer setting up a scheme, and it will be available to self-employed people too.

Some parents may benefit from the new scheme, some will lose out and some will not be eligible. An important point is that TFC is per child, whereas CCVs are per parent. So a family with two working parents can double their savings by both getting CCVs, and a family with two or more children can make greater savings with TFC providing the eligibility criteria is met.

You can join an existing voucher scheme straight away, however the window of opportunity to join will close in April 2018. Childcare vouchers require your employer to join a scheme (at no cost to them) where part of your pay (up to £243 per month) will be paid into the voucher account Tax and National Insurance free. You then use this account to pay your childcare provider, on average you can save about £1,000 per year, plus savings on various different lifestyle products and services that are available to scheme users. So if you want to start making a saving today or think this would be your best option in the future now is the time to take action!

For more information on funding your childcare https://www.gov.uk/childcaresupport

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