The recent Spring Budget announced one of the biggest investments in childcare that this country has seen. This £4 billion boost to childcare has been welcomed by parents, but questions have been asked about who will benefit, whether costs could have been reduced further and whether the Government will be able to deliver on its promises.
Currently, parents get help with childcare through the childcare element of Universal Credit or the Tax Free Childcare scheme and through free early education. Universal Credit covers up to 85% of parents’ childcare costs for those receiving this benefit, up to a monthly cap.
In the most up-to-date data from February 2022, 119,000 households were receiving help through Universal Credit, of which 77% were single parent households. The Chancellor has announced that the monthly cap will rise to £951 each month for one child, up from £646 today. Childcare costs will also be paid up front, rather than in arrears.
The Tax Free Childcare scheme reaches families in higher income brackets, with any parent eligible for help, unless their income – or their partner’s – is more than £100,000 in a year. The scheme covers up to 20% of childcare costs up to a maximum of £2,000 per year.
