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How to save money on child care: six ways to reduce the cost

As the cost-of-living crisis affects millions of people, parents are looking for ways to save money on child care, often one of the largest fixed costs.

Parents are paying 2.5 per cent more for childcare than they did last year, with part-time childcare costing a whopping £7,000, while full-time childcare could cost you a staggering amount of £11,000 a year, research suggests.

Single-parent households, meanwhile, are expected to bear the brunt of the cost-of-living crisis, with a third saying they have been forced to cut back or go without food or heating to pay rising costs.

Single parents are concerned about the cost-of-living crisis, with a third saying they have been forced to skip meals or forego heat in order to afford everyday essentials.

Single parents are concerned about the cost-of-living crisis, with a third saying they have been forced to skip meals or forego heat in order to afford everyday essentials.

In fact, 95 percent of single parents have been concerned about the rising cost of essentials in the past 12 months, compared to 57 percent of adults overall, research by Savanta ComRes shows. On behalf of Gingerbread.

Single parents were also found to be twice as likely to have felt depressed due to financial worries, with more than half of single parents seeing their financial situation worsen, while two in five expect things to get even worse during next year.

Which? has put together a number of ways to help reduce childcare costs and relieve stress for working, single, and struggling parents.

While the best options for saving money depend on personal circumstances, there is some government and local support available for those who may be struggling.

1. Working parents can claim tax-free child care

Tax-free childcare is a government scheme that pays working parents a supplement based on childcare costs.

You could receive up to £2,000 per child per year in quarterly installments. If you have a disabled child, you can receive up to £4,000 per child, ie up to £1,000 every three months.

You and any partners must be over 16 and each expect to earn at least £152 per week, which is equivalent to 16 hours at the National Minimum or Living Wage.

If you or your partner are on maternity, paternity, or adoption leave, or unable to work because you are disabled or have caregiving responsibilities, you may also be eligible.

Unfortunately, though, you can’t get tax-free childcare if you or your partner individually expect to earn £100,000 or more.

2. Check if you are eligible for tax credits or Universal Credit

Both the Working Tax Credit and the Universal Credit offer additional support for families, where the government gives the beneficiary extra money to pay for child care.

To qualify for the work tax credit, the person claiming it and their partner must work at least 16 hours a week.

A person may be out of work if they are entitled to carer’s allowance, in prison, in hospital or disabled.

It is possible to save up to 70 per cent on childcare costs, up to a maximum of £175 per week for one child or £300 for two or more children.

Similarly, people who apply for Universal Credit can cover 85 per cent of their childcare costs, up to a maximum of £646 per month for one child, or £1,108 for two or more children.

3. Take advantage of free childcare hours

In England, there are schemes available for parents with very young children.

The ‘free childcare for two-year-olds’ scheme is for those who receive certain benefits. In addition, everyone is entitled to 15 hours of free childcare per week for children ages three or four.

This is for 38 weeks per year, but parents can choose to take fewer hours to spread this out over more weeks.

Those with lower incomes could claim 30 hours of free child care a week, as long as they and their partners earn at least the national minimum wage or living wage.

In Scotland, all three and four year olds are entitled to around 30 hours of free childcare per year. There is also a two-year-old plan for those with certain benefits and low income.

In Wales, children aged three and four can receive 30 hours of free childcare per week. The 30 hours are made up of a minimum of 10 hours per week of early childhood education and a maximum of 20 hours per week of childcare.

In Northern Ireland, three- and four-year-olds receive 12.5 hours of free childcare per week during school term through a funded preschool site.

Parents are concerned about paying for childcare, as part-time childcare for a child costs a whopping £7,000 a year.

Parents are concerned about paying for childcare, as part-time childcare for a child costs a whopping £7,000 a year.

4. Don’t forget about child benefit

While not specific to child care, government child benefit payments can help lower the cost of child care.

For tax year 2022-23, parents can claim £21.80 for their first child and an additional £14.45 a week for any additional children.

Parents will be paid child benefit until their child turns 16, or until they turn 21 if they are in an approved form of education or training.

It is worth noting that the Child Benefit is not means-tested. However, if one of the parents earns more than £50,000 a year, they will incur a tax charge on the money received.

If they earn more than £60,000 a year, they will have to repay all benefits received.

Still, which one? suggests it’s worth signing up and simply opting out of payments, as parents will receive National Insurance credits while they’re out of work.

5. Involve grandparents or try sharing with parents

Grandparents are often the first port of call for help with child care, though many are unaware that they might qualify for benefits as a result.

For grandparents who are not yet retired and are caring for a child under the age of 12, they may qualify for National Insurance credits, and the time spent caring for them counts toward their state pension eligibility.

Another option is to share your babysitting duties with a friend or fellow parent.

For parents with friends who have similar schedules and childcare needs, a cheaper or free childcare option is to consider babysitting for others.

While this removes the advantage of professional childcare, it can also allow children to socialize with others and can save both of you thousands of pounds a year.

Local charities and child care trusts can offer a number of free or affordable activities to help keep children happy and support parents who are concerned about rising costs.

Local charities and child care trusts can offer a number of free or affordable activities to help keep children happy and support parents who are concerned about rising costs.

6. Find cheap activities with local charities

Many councils offer free events and activities during the school holidays, so it is worth checking the relevant sites.

Organizations like the YMCA, local church groups, or local authority gambling schemes might be good places to look for free after-school clubs and classes.

These are intended for parents who are unable to pick up their children after school, which can save a lot of money compared to a babysitter or babysitter.

However, services may be limited to serving only certain schools in the local area.

You can also talk to your child’s school to see what options they might offer to help you and your child.

School-based clubs or hobbies could be a great way to help your child develop a lifelong interest or skills, as well as their social skills, but they can also offer you a few extra hours each week of babysitting. kids.

Reena Sewraz, Which? The money expert said: ‘The cost of living crisis is putting huge pressure on household finances, with millions of families struggling to make ends meet.

‘Childcare is a necessity for working parents, but it can be extremely expensive. In many cases, it is one of the largest financial commitments after housing costs, so it is extremely concerning that many are struggling to pay for it.

‘There are a number of schemes available from the government to help alleviate some of the costs of childcare. However, these will not be an option for everyone.

“There are also alternative ways to save money, such as sharing with parents or asking family members for help, while charities and local councils may also offer free after-school clubs and classes.”

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