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Organising childcare can be a real struggle, but practical and financial help is available, says Laura Marcus
Trying to find the best available childcare in your area at a price you can afford is almost a full-time job in itself. But there is help out there. When the Labour government came to power in 1997 there was only one registered childcare place for every nine parents who wanted one; now it is one in three. But while parents have more chance of finding suitable childcare it still comes at a cost. We take a look at the options available and the help on offer to working parents.
Babies and young children
Nannies are employed by parents to care for children at home and can be suitable for parents who need flexible childcare. Although many do have nursery nurse or childcare training, nannies do not have to hold qualifications and there is no central registration for them.
Nannies cost between £150 and £400 a week depending on their duties and whether they "live in" or not. As their employer, parents are responsible for paying a nanny's income tax and national insurance, which will add to the cost of employing them. Sure Start publishes a guide to choosing a nanny.
Childminders care for children at their own home rather than at the child's family home. They are only allowed to care for a certain number of children at a time, depending on the children's ages. The typical cost of a full-time place with a childminder for a child under two is around £150 a week.
You can get help towards these payments under the childcare element of tax credits if your child attends a registered childminder. When you fill in the form for the childcare element of the credits you must say who your child will be looked after, and this person must be registered with their local authority.
Creches and day nurseries. Very few workplace creches, where care is provided on the premises by an employer, remain – those that do exist are mostly in the public sector, such as hospitals and colleges. If you are lucky enough to have such a facility, find out whether you can pay with childcare vouchers, which will reduce the cost through tax relief.
Many parents opt for a private day nursery to look after their children. According to the Daycare Trust, a typical full-time nursery place for a child under two in England now costs £167 a week, or £8,684 a year. However, the highest costs in the country see parents paying as much as £400 a week, the equivalent of £20,800 a year. Prices are highest in London and the south-east, averaging between £172 and £226 a week. The lowest are in the Midlands and the north of England. The average weekly cost of a nursery place in Wales is now £146 a week, equivalent to £7,592 a year. In Scotland it is £158 a week, equivalent to £8,216 a year.
Family and friends. "If you are working shifts or are low paid, formal childcare may not be the right route," says Sarah Jackson, chief executive of Working Families. "Childcare is about family life, and for many parents paying a third party is not what they want." Which may explain why one in four families relies on grandparents for childcare, according to Sam Smethers, chief executive of Grandparents Plus. This can be the most flexible and least expensive option for working parents, and of course knowing a child is with a family member can bring invaluable peace of mind.
A spokesman for the Daycare Trust says: "The role of grandparents and relatives in caring for children needs to be supported. Childcare is not just about warehousing children while their parents work. It is about a positive education experience – good quality childcare can give kids a head start at school, especially children from economically deprived backgrounds."
If you pay grandparents or friends to look after children, be aware of the tax implications. There are currently no allowances, tax breaks or grants for grandparents who care for grandchildren. If grandparents register as childminders they can receive support and training and can be paid by the parent who can claim back some of the cost through Working Tax Credit. However, at present grandparents can only do this if they also care for a child who is not a relative
School children
Wraparound care. Many schools provide breakfast and after school clubs, which allow children to be dropped off at 8am and collected at 6pm. Provision varies enormously, as do prices, with sessions costing from around £2.50 for breakfast clubs and between £5 and £10 for after school clubs. You can use the childcare element of tax credit to help pay for this where it is provided in a school.
Holiday schemes are invaluable if you have to work during the school breaks. These are often run by voluntary organisations, local authorities or charities in parks, community centres, leisure centres and schools. They are a great place for children to meet friends and offer a range of activities to keep them busy, such as sports, drama, arts and crafts, and music. Costs vary according to your local authority, but you could expect to pay around £50 a week for a full-time place. Your council should have information on what is available.
Help with the costs
Early years education subsidy. The most widely used childcare subsidy is free part-time early years education, according to the Daycare Trust. Every three- and four-year-old is entitled to 12 and a half hours free a week, increasing to 15 hours by 2010. If you want more than the free allocation you have to pay the difference.
If you are on tax credits you will pay less, with the cost worked out on a sliding scale.
Tax credits. Parents can get 80% of childcare costs through tax credits, but you must use a registered childcare provider to qualify. The Working Families website offers a ready reckoner to help you work out your entitlement.
Childcare vouchers. If your employer offers the perk, a working parent can give up part of his or her salary in return for childcare vouchers, which can be used with registered carers. In practice, up to £55 a week is paid tax free into a separate account with a voucher scheme provider. The money can then be used to pay for registered and eligible childcare facilities.
The schemes are overseen by HM Revenue & Customs because they are covered by tax law rather than employment law. If the employers of both parents offer the scheme, the savings can be worth £1,195 a year. The schemes are growing in popularity, but according to the Daycare Trust only 19% of employers offer any kind of support with childcare costs, including voucher schemes.
Voucher schemes could affect your eligibility to claim tax credits, so weigh up the benefits of each before you choose the scheme that suits you best.
Choosing childcare for your children is not just about cost, it is also about finding the option that best suits your child and your circumstances. But do your research and you should find that at least some financial help is available.
More information
Find out what is on offer in your area from your local authority, which will have a local family information service you can call to find out about childcare. Since 2006, authorities must have a market manager for childcare so they can audit whether or not there is sufficient in the area.
The Daycare Trust information line (0845 872 6251) is open Monday, Tuesday, Thursday and Friday from 10am to 1pm and 2pm to 5pm and Wednesdays from 2pm to 5pm.
Working Families provides free factsheets and legal helplines, while government advice on choosing childcare is available on direct.gov.uk and from job centres and Sure Start centres, if you have one.
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