The cost of raising children from birth to the age of 11, has risen significantly in recent years by 4% to the figure of £87,000*, according to the annual Halifax Cost of Childcare research. Unsurprisingly, childcare is the largest and most costly element of raising a child, accounting for nearly half of the monthly outlay for each child (**£320).
The cost of childcare can vary, depending on the child's age and needs. Many parents will not need childcare after their children start school, other than for school holidays. With holiday clubs, play schemes, activity camps, child minders and nannies, there are a variety of options to choose from, however, these can be costly.
There is a way to help parents save money on childcare costs this half-term: through using Childcare Vouchers. Childcare Vouchers are available through employers to pay for any registered childcare for children up to the age of 16, and can provide savings of up to £933** per year. Simple to use, a chosen amount is deducted from your wages in return for the same amount of Childcare Vouchers before tax and National Insurance. They are then placed into an online account for parents to use to pay their childcare provider(s).
Vouchers can be deducted each month or as and when they are required. They can be saved up in the online account for when they are needed – perfect for those who only need them to pay for sporadic or school holiday childcare. Both parents can join their employer's Childcare Voucher scheme, potentially doubling savings – making childcare more affordable.
The Government were planning to launch their new Tax-free Childcare scheme in autumn 2015, but this has now been delayed till 2017. Currently, Childcare Vouchers are the only option for working parents who want to save on their childcare costs. Furthermore, they will be many parents who will be better off continuing to use Childcare Vouchers as the savings they provide will be more than they would get through Tax-free Childcare. Under the new scheme, many parents will be worse off, including middle-low earning parents, families with only one working parent, families using childcare for only a few days a week and those who have children in childcare over the age of 12. Childcare Vouchers are therefore the answer.
Speak to your employer today about Childcare Vouchers – they will save money too. Alternatively, contact Busy Bees Benefits at www.busybeesbenefits.com or on 0330 333 9100 and they will discuss the scheme with employers on your behalf.