Working parents will be given a childcare tax break worth £2,000 per child as part of measures to be unveiled in tomorrow's Budget.
The current situation bolts too many families into financial hardship, with high childcare costs meaning that for them working doesn't pay.
From April 2015, new parents will be able to share up to a year’s leave from the birth of their child. Here's what you need to know.
A tax break for working parents trying to meet childcare costs will be more generous than expected and include all children under the age of 12, the Government has announced.
The new scheme will be worth £2,000 per child, instead of the £1,200 that was first proposed and will be brought in by the Autumn of 2015.
Announced just ahead of Wednesday's annual budget speech, the Government will extend the cut off age from five-years-old to include all children under 12.
Around 1.9 million families could benefit, twice as many as under the present voucher scheme which is only available where adopted by an employer.
But the policy has faced criticism for excluding couples where one parent does not work and being available to high-earning households with a joint income of up to £300,000.
In the last five years the price of part-time nursery care for a child under two has risen by 27%, with parents paying around £1,214 more in 2014 than in 2009 according to a new report.
These figures come from a Family and Childcare Trust report which says that families are paying more on average for part-time childcare than they spend on their mortgage.
For a family with two youngsters in full-time childcare the average yearly cost is £11,700, the report adds, 62% higher than the average yearly mortgage bill for a family home.
The study says that since 2002, childcare costs have risen more than inflation each year and that international data shows that parents in Britain hand over more than a quarter of their salary (26.6%), more than most other European nations.
Families are paying more on average for part-time childcare than they spend on their mortgages, according to a new report.
It reveals parents are handing over more than £7,500 a year for childcare for two children, around 4.7% more than the average mortgage bill.
The report, by the Family and Childcare Trust, also suggests that some families maybe spending more on childcare than they do on their weekly shopping
It found that a family with one two-year-old child attending nursery part-time (25 hours a week) and a five-year-old in an after-school club will pay out £7,549 a year on average.
This is higher than the UK average annual UK mortgage, which the report says is £7,207 according to official data.
Gingerbread, which provides advice and practical support for single parents, said that under the new Universal Credit system, parents earning above the income tax threshold (due to rise to £10,000 in April) will be able to claim back 85% of childcare costs.
But those below it will only be able to claim 70%, meaning that, effectively, families on the lowest incomes will pay double for their childcare.
– Gingerbread chief executive Fiona Weir
Extra childcare support for families is very welcome - but government plans will leave the lowest earners behind and many will still struggle to afford to go out to work.
It seems extraordinary that those who earn the least should pay more for childcare. And future increases to the tax threshold will only worsen the problem.
That's why we're calling on the Government to give equal childcare support to all parents under universal credit.
Gingerbread said that with both of the Coalition parties reportedly planning to commit to further personal tax threshold rises, even more parents look set to stop paying income tax but see their childcare costs double.
The Government's new childcare policy discriminates against the lowest earners and will hold many single parents back from going to work, a charity has warned.
Gingerbread is concerned that the plan for childcare support under Universal Credit creates a two-tier system which leaves the lowest earners with the least support and that planned increases to the personal tax allowance will only exacerbate the issue.
The charity is urging Chancellor George Osborne to rethink the plans, which it says will discriminate against parents whose earnings are below the income tax threshold.
The soaring cost of childcare is forcing many mothers to stay at home instead of returning to work, a new survey has suggested.
Between 64 and 67 per cent of mothers said childcare costs is a major obstacle to working, while 37 per cent of stay-at-home mothers expressed a desire to return to work.
The survey conducted by The Resolution Foundation and Mumsnet of 2,000 mums also found that 20 per cent of working mothers would like to work more but feel they are unable to.
"A mother being able to work, or to work longer hours, can often be the factor that lifts a family out of poverty and this report shows that many mums want to do exactly that," Vidhya Alakeson, deputy chief executive of the Resolution Foundation and author of the report, said.
"The problem is that we do worse than several other countries on maternal employment - especially for single mothers and mothers of three-to-five year olds - which is precisely the group where most childcare support is being targeted."
The head of the campaign group Maternity Action has called the government's reforms to parental leave a "useful but very modest step in the right direction":
– Rosalind Bragg, Director, Maternity Action
The ‘right to return’ arrangements are complex, unfair and will confuse both parents and their employers.
It is not right that a woman who takes a week of shared parental leave to settle her daughter into childcare can find that her job has altered during her absence ...
If the Government wants parents to make use of the new flexible leave, they must introduce fair and simple arrangements which protect parents’ jobs when they are at home caring for their new baby.
Alexander Ehmann, of the Institute of Directors, has said that reforms to parental leave "increase the burdens on the employer".
As an example, he said the fact that parents can change their preferences twice means that, in theory, they could take three separate blocks of leave instead of a single continuous one.
He told BBC Radio 4's Today programme that the changes were "all in favour of parents".