The kids may be off, but it doesn’t mean you are. Martin Lewis is here to check you’re not missing out on £1,000s of childcare cost help this summer.
A recent survey revealed over 35% of parents pay more in childcare than rent or mortgage. Many have considered quitting work due to its costs. Yet help is available, even if just for the summer.
This isn't just for babies. School summer clubs for hairy, 16st, rugby-playing 15-year-olds (and that's just the girls) can count as 'childcare' too. Anything including school and summer clubs, nurseries, playgroups, nannies, childminders or au pairs can count, as long as it’s Ofsted-registered and regulated in England (or registered and regulated by the Care and Social Services Inspectorate in Wales, the Care Inspectorate in Scotland and the Department of Health, Social Services and Public Safety in Northern Ireland.)
Here’s what you need to know..
Are you eligible for tax credits for childcare?
If you work and pay for childcare you could be entitled to serious help, even if it’s only childcare during the summer holidays (and these days when you only pay during the summer, payment is only given during that time to make budgeting easier, rather than spread across the year as it used to be).
You should definitely check it out if you’re a single parent working 16+ hours/week, or a couple both working 16+ hours/week and have a total household income of under £42,000, as you may be eligible for what’s called the Childcare Element of Working Tax Credit (in some circumstances even those with a higher household income can be eligible, but the bulk of people only get it when their household earns under £42,000).
This can be big money - the average payout is over £3,000 a year, so it’s definitely worth checking. Call the tax credit helpline on 0345 300 3900 to discuss it.
Can you get childcare vouchers?
This lets you pay for 'childcare' for kids aged up to 15-years-old from PRE-tax earnings. So you get £1,000 of vouchers for £1,000 of salary, which after basic tax is worth just £700 in your pay packet, so you're £300 up.
The amount you can get changes depending on your tax band – although some households can gain over £1,000 a year. Sadly, it's only available if your employer's signed up – check with your HR or personnel department to see if yours is.
There’s one slight issue - using childcare vouchers can decrease the amount of childcare tax credit you’re eligible for. That’s based on how much you pay in cash for childcare, paying in vouchers doesn’t count for its purposes. So, if you are eligible for tax credits, you need to check whether it’s actually worth you getting vouchers.
Free/subsidised summer clubs
Many schools, community centres and youth groups offer clubs (eg, urban art or archery) in the summer – sometimes these are free, sometimes not. For more information, check the Daycare Trust website for your nearest Family Information Service, or ask your local authority.
Even if you do have to pay, usually you will be eligible for tax credits for these clubs (provided they’re Ofsted-registered in England) or to pay in childcare vouchers, which should reduce the cost.
Those in England with kids who will be 16 or 17 by or on 31 August this year should also hastily check the National Citizen Service - it has three-week courses (two weeks residential and one week in the local area). It aims to teach kids new skills, help them meet new people and try activities such as trekking, climbing and rafting. Around half are free, or they cost no more than £80. Go quick for a place.
Daily updated hints, tips and money help from Martin Lewis at MoneySavingExpert.com