Modern parenthood is about striking a balance between caring for your children and earning a crust. Many families need childcare options to balance the juggle. If you don’t know your nannies from your au pairs, read our guide to childcare to help you decide what’s right for you and your family
Does Childcare cost more than your mortgage?
Going back to work
If you need two incomes to make ends meet you are not alone, many couples do. Or maybe you are a single parent worried how to work and raise your baby? Whatever your situation, once you are getting back to work, childcare is a major complication and you need to consider your options.
Do the maths first
It is well worth doing the maths first though, to make sure that once you/your partner has covered fees and other work-related expenses, that the difference in your income, is what you imagine it will be. Some families realise, once they have looked at all their childcare options, that they are not financially better off (in the short-term) by one of them returning to work!
However, you may also choose to return back to work to stay on the career ladder and for other longer term goals and prospects. So it is a decision that only you can make.
How much childcare do you really NEED?
Childcare is a huge expense and one way of keeping costs down is by using as little as possible. Here are some options for limiting your childcare.
- Try a Night Shift. One of you works days, the other evening or nights. This works well for giving you both time with your child, but you may not see each other much.
- What about if you both worked part-time? This can be easier to arrange if one of you is self-employed, as you have more control over choosing your hours. You will need to do more than some back of an envelope calculations on this one as you only working part-time may mean that your income is too restricted.
- Rope in family. Can Grandparents or other trusted family members support you, even half a day adds up.
- What sort of professional childcare? Options include childminders, au pairs, nannies and nurseries. They all have different prices and different advantages.
When considering your childcare options you need to balance two questions: what feels best for you and for your child and what can you afford?
Think Mary Poppins – usually they’re full-time, will come to your home, and devote themselves to your children. Although a Nanny share in an increasingly popular option.
- You’ll need enough money to afford their salary and an employment contract. You will also be responsible for deducting tax and National Insurance.
- Rates depend on experience and demand, and the nature of their work means that they are usually contracted to one family for a lengthy period of time.
- If they are ill, you will not have any back up to look after your children…
- But if your child is ill, you can still use your nanny.
- If you employ a live-in nanny, you’ll need a spare room.
- When choosing a nanny use a reputable agency; there are no government regulations concerning nannies so you should check references and qualifications carefully.
- Consider three questions. How do they relate to your child? Do they share your approach to childcare (bedtimes, feeding, sleep, rewards, sanctions)? Do you all get on with them?
In the UK, au pairs are usually international students.
- They live as part of your family and so will need accommodation and food. In return for this and a small allowance, they do some light housework and childcare, balancing it with their studies.
- Au pairs work out much cheaper than nannies, but they cannot be expected to do the same level of work, nor have the same experience or qualifications.
A childminder is someone who looks after small groups of children in their own home, for more than two hours a day. They often have their own children too who are part of the group they care for.
- In England and Wales, childminders must complete a basic registration course and can look after six children under eight-years-old (no more than three of them under five and only one under one). There are exceptions – read Pacey’s guide here
- Childminders must be registered, in England with Ofsted, in Wales with CSSIW and in Scotland with the Scottish Care Inspectorate.
- Their experience and training can widely differ, so check their references.
- If they are ill, or one of their children is, they may not be able to look after your child.
The pros of nurseries include:
- Qualified staff.
- Lots of opportunities to learn and play with other children.
- Good facilities and activities.
- They will always be open, so there is less risk of being let down by a poorly nanny or childminder
- Long opening times which can be beneficial for office hours
Some of the cons might include:
- Your child is likely to be looked after by more than one member of staff, so it might take longer for them to build relationships with them, and staff may leave or change too.
- Depending on the size of the nursery, it might be very busy and some children find these environments overwhelming
- Nursery is unlikely to be able to give a younger child or baby one to one time, they will be part of a small group.
- You don’t get to choose the staff working there
- If your child is ill, they will not be able to attend.
- If you are late picking your child up, you might get fined.
- They tend to be less flexible, and once you have booked your days/times, these can be difficult to change.
Find out more about choosing a nursery, over at Choosing a nursery: what you need to know
These vary in how they run and when they are open, so you will need to contact them individually to find out more.
Pre-schools may only offer morning or afternoon sessions, so may not be suitable for those returning to work unless there is also other care in place.
If your child is ill, they will not be able to attend.
Your child is likely to be looked after by more than one member of staff, so it might take longer for them to build relationships with them, and staff may leave or change too.
They can be linked to a local school, so can be useful for children meeting others who they may be going to school with in the following years. Some playgroups will also join in with some activities at the linked school, so the pre-schoolers also have an opportunity to get to know some of the teachers and environment, before they attend.
Help with Childcare costs
The quotes you will get from any childcare provider will make your head spin. There are some schemes which can help with the cost. But like everything with parenting, the jargon can be a little impenetrable. So here is a very short guide to schemes that might help.
What are childcare vouchers?
These are being phased out, but were a salary sacrifice scheme, where you could buy them before paying tax or national insurance. If you joined a scheme with your employer before October 2018 you might still be eligible to receive these, but in the main now you’ll be looking at setting up a Tax Free Childcare account.
What is Tax-Free Childcare?
For working parents, who work at least the equivalent of 16 hours at National Minimum Wage. You can pay money into this system and receive back the tax (up to £500 every three months on your payments). Simply that means you pay in £8 and get £10 back to pay your childcare provider. There are limits, your child has to be 11 or under, you have to earn less than £100,000.
Check your eligibility and the Ts&Cs here
Make sure you chose the option that is best for your family, as if you are successful in your application for Tax-Free Childcare, other schemes such as Tax Credits will stop.
Free childcare options
All children aged 3 or 4 are eligible for 15 hours free childcare. Some children, receive this support from aged 2.
Check your eligibility here.
For working parents, who work at least the equivalent of 16 hours at National Minimum Wage this offer increases to 30 hours per week.
Note you can claim this from the term following your child’s birthday, but you need to apply for the codes promptly so you can give them to your childcare setting before the term begins.
Working Tax Credit
If you are already receiving Working Tax Credit, you can get the Childcare element to support the expense of your child’s care. You can be helped with up to 70% of your childcare costs if your costs are no more than:
- £175 per week for one child
- Or £300 per week for two or more children
If you aren’t already claiming Working Tax credit, you would now be looking to apply to –
Universal Credit and Childcare
If you and your partner (if you live with them) are working and you are eligible for Universal Credit you may be able to claim back up to 85% of your childcare costs. The most you can get back each month is:
- £646 for one child
- £1108 for 2 or more children
Be sure to check how you will fund this initially, as the system asks that parents pay costs upfront and are then reimbursed.
A useful calculator
If you are a full-time student in HE you might be eligible for a childcare grant, which doesn’t have to be repaid. The grant will cover 85% of your expenses up to a fixed value.
For more ideas:
Article originally written by Dean B and published May 2012, updated September 2021.