How to manage with nursery fees in London?
The cost of nursery care for just one child in London costs around £14,000 a year, which is £5,000 a year more expensive than the approximate annual cost of a private school. If you have more than one child, the rates double. This means that bill for using a childcare centre to care for your children while you work is more expensive than the average annual wage for a UK employee. This can mean some parents are just working to pay childcare bills.
Thankfully there are ways you can cut costs:
Ask your employer if they are part of the childcare voucher scheme. Lots of companies are. You could obtain up to £1,000 a year for children up to the age of 15 using these vouchers. The scheme usually works by taking a pay cut of the same amount. After tax and contributions the amount deducted from your wage packet would be £700. As the vouchers are tax free, you would then increase your income by £300. This doesn’t sound like a lot but every penny counts.
Some employers can be generous and supply vouchers on top of your normal wage, but this is the exception rather than the rule. You can use your vouchers for childcare facilities and for private tutorage since tutors provide both care and education simultaneously. Childcare vouchers will be available until 2017.
New Government Tax Free Childcare Scheme
A new government scheme being introduced in 2017 will allow working families to claim 20% of their childcare costs for each child (up to £2,000 per child). This scheme is available for able children under the age of 12 and for disabled children up to 16. This will replace the childcare voucher scheme.
Free Childcare for Toddlers
If you have a three or four year old you will be entitled to 15 hours a week free childcare as part of a government plan to bring nursery education to more children. You can use this free childcare at day nurseries, playgroups or pre-school, sure start children’s centres and for registered childminders. Making use of the 15 hours a week free education will reduce your childcare bill, or if you’re working part-time, may pay the bill altogether. Some two year olds are also eligible. If you receive tax credits to top up a lower income or you have a disabled child who receives disability living allowance or has a statement of special educational needs you will be able to obtain 15 hours of education and childcare for them too.
If you receive child tax credits that are available to families on a lower income you can use your tax credits to pay for 70% of your childcare costs. This makes the price of day nursery more affordable for families on a smaller income and can enable them to stay in work.
Use Child Benefit towards the Cost
Every child in the UK receives child benefit, which is £20.30 a week for the first child and £13.40 a week for subsequent children. You could use this as a contribution to your childcare bill.
Only Use the Day Nursery Part-Time
Another way to save money is to use your day nursery part-time. If you work full time, you may be able to rely on care given by family members or a registered childminder as well. If grandma or a minder are available some of the time and can transport your child to the day nursery, this will save you pounds and may even make your childcare free if you combine it with the 15 free hours for three and four year olds.