Starting today, families will be able to claim free childcare for children as young as nine months via a new aid support scheme, saving an average of almost £3,500 a year. Households living in central London are expected to make the highest average annual savings, totalling an impressive £4,882.
New Support Scheme Provides Free Childcare for 9-Month-Olds
AJ Bell personal finance director Laura Suter says parents can look forward to receiving the next tranche of free childcare hours from the government from September, which will undoubtedly provide a much-needed financial boost.
Thanks to the extension, parents with children aged nine months will now be able to receive 15 hours of free childcare at a nursery or with a childminder, and they can apply for the service now.
According to Ms Suter, parents are finding it difficult to work out exactly how much they can save thanks to the government's financial assistance.
Ms Suter estimates that, based on average childcare costs, parents can expect a substantial annual reduction of up to £3,500 in their costs as a result of the government's financial assistance.
Calculations are based on the assumption that parents use all 15 hours of childcare during the quarter, which corresponds to a total of 38 weeks per year.
AJ Bell's full list of the average annual savings of 15 hours of free childcare across the country is as follows:
- England - average - £3,478
- Inner London - £4,882
- Outer London - £4,053
- South East - £3,800
- East of England - £3,717
- South West - £3,497
- North West - £3,276
- West Midlands - £3,067
- North East - £3,058
- Yorkshire and The Humber - £3,053
- East Midlands - £2,855
Who Qualifies?
From September, parents can apply for 15 hours a week for children aged nine months and over; however, until then, free hours are only available for children aged two and over.
Families with children aged three or four can claim 30 hours of free childcare. To qualify, both parents must be in employment and individually earn at least £183 per week.
However, parents of children aged two or under will no longer receive free childcare if either parent earns more than £100,000 (excluding pension contributions).
Where either parent earns more than £100,000, parents of three- and four-year-olds will see their entitlement to free hours reduced from 30 to 15 hours a week.
Claiming the Benefits
According to Ms Suter, it is necessary to proactively apply for free hours through the government website, rather than simply assuming that they will be granted automatically.
The opportunity to claim starts at the beginning of the quarter following the child's age. For example, if your child turns nine months old at the beginning of October, you will have to wait until January to start the application procedure.
If you do not submit an application before the start of the quarter, you will have to wait until the following quarter to receive benefits. So, for instance, people who miss the September application deadline will not be able to benefit from free hours until January.
In addition, Ms Suter highlighted a number of important considerations regarding the new support. It is essential to recognise that childcare costs differ considerably from country to country, which means that the extent of savings will depend on one's geographical location.
She explained: "Inner London costs are the highest, which means that on average parents in that area could save up to £4,882 a year in nursery fees - although as this is the average some parents could save more.
"On the flip side, those living in the East Midlands pay the lowest costs in the country on average, and so the new free hours will save them £2,855 a year on average."