Money Matters: New Government Childcare Offer

In this week's Money Matters column, Wrekin's Debt & Energy Manager Dan Bebbington discusses what we know about the UK Government’s new childcare offer.

Earlier this month, the UK Government announced new measures to help parents with the cost of childcare.

As part of a package included in the Spring Budget, Chancellor Jeremy Hunt revealed free childcare for working parents in England is to be expanded to cover one and two-year-olds.

Meanwhile, the amount parents who receive Universal Credit can claim towards childcare costs will increase from this summer.

Childcare costs in the UK are among the highest in the world and it’s good to see the government stepping in to provide more support for parents.

We’ve seen first-hand how rising childcare costs can be a barrier for some parents looking to go back to work or wanting to work full time.

In terms of the specific details of these initiatives, we know that the Universal Credit childcare cost cap will go up from £646.35 to £951 for people with one child and from £1,108.04 to £1,630 for those with two children.

Those figures will then increase in line with Consumer Prices Index (CPI) measure of inflation each year until 2027/28.

The changes mean some of the financial support will be provided up front in future, rather than parents having to apply for reimbursement after paying the full costs themselves.

With regards to the extension of the free childcare offer, the government currently offer 15 hours free childcare per week for all three and four-year-olds, rising to 30 hours for working families.

The new measures will expand the offer to allow eligible working parents with children aged from nine months up to school age to access between 15 to 30 hours of free childcare per week.

The offer will be introduced gradually, starting with parents of two-year-olds, who will be able to get 15 hours from April 2024.

Parents of children aged from nine months will be able to access 15 hours by September 2024, with the offer increased to the full 30 hours by September 2025.

The government said the staggered approach was needed to give childminders and nurseries time to prepare for the changes, ensuring there are enough places to meet demand.

Those eligible are working parents who individually earn more than £8,670 per year but have a taxable income of less than £100,000.

You can find out more information on the support available on the Childcare Choices website at www.childcarechoices.gov.uk

30th March 2023