Childcare costs have long been a significant financial burden for many families in the UK. To address this, the UK Government has introduced a support scheme aimed at providing financial relief. According to GB News, the initiative could save households up to £7,500 annually on childcare costs per child.
This scheme, known as the “Plan for Change,” has already made notable strides, with more than 530,000 children benefiting from the assistance. However, questions remain about how the scheme works, who qualifies, and what the future holds for families relying on this support. Here’s an overview of the programme and its eligibility criteria.
A Boost for Families and the Economy
The government’s childcare initiative, spearheaded by Education Secretary Bridget Phillipson, has provided substantial savings for parents. The Plan for Change is designed not only to alleviate financial stress but also to support children’s early education. In fact, around 530,000 children have already benefited from the scheme, surpassing initial targets set for the year. The programme is expected to save families up to £7,500 per child annually in childcare costs.
This large-scale support is expected to have a ripple effect on the UK economy, too. By allowing parents to continue working without the hefty cost of childcare, it has enabled families to contribute more to the economy while ensuring children receive high-quality early education.
In addition, families across the country, from the North West to the South East, are making use of the scheme. For instance, the North West has validated over 78,000 codes, and the South East has almost 92,000 codes validated, showing the broad adoption of the programme.
Are You Eligible for Childcare Support?
The eligibility for this scheme is fairly specific but broad enough to include many working parents. Families who meet certain criteria, including having children aged between nine months and four years, are eligible for childcare funding. However, there are some income restrictions.
According to Alexandra Loydon, group advice director at St. James’s Place, families where one or both parents earn £100,000 or more annually are excluded from the scheme. Additionally, parents must work a minimum of 16 hours per week at the National Minimum Wage or the National Living Wage to qualify.
Families that earn more than £100,000 a year are also excluded from the tax-free childcare scheme, where the government adds £2 for every £8 spent on approved childcare.
Furthermore, child benefit (worth £1,354.60 a year for the first child and £897 for each additional child) starts to be reduced when one parent earns more than £60,000 and is lost entirely once earnings reach £80,000.
This makes it particularly difficult for high earners to benefit from these childcare support initiatives. Loydon suggests that families just above these thresholds may want to explore strategies to reduce their taxable income, such as maximizing pension contributions or using salary sacrifice schemes.
What the Numbers Say
Childcare can be an expensive venture. On average, part-time nursery care for a child under two costs around £138 per week, while full-time care can run up to £263 per week. These figures have been climbing steadily, and with the cost of raising a child at an all-time high, many families are looking for any assistance they can get.
By cutting down these costs, the government has made a significant dent in what was previously a huge financial burden for working parents. In light of the scheme’s success, Ms. Phillipson said:
When we launched the 30 hours childcare expansion at the start of September, we said around half a million families were on track to benefit. Today’s figures show we have gone even further. It is fantastic to see our Plan for Change delivering for families – helping them save up to £7,500 a year per child on childcare costs and supporting parents to balance work and home life.
