How to cut your childcare costs.

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From tax breaks to sharing a nanny, there are savings to be made when it comes to caring for your little ones if you think creatively, plan ahead and have the knowledge you need to be informed.

I was speaking on BBC Radio Leeds this morning about the spiralling cost of childcare.

I work with many families helping them to work out new and different ways to balance their work, life and childcare costs.

I was speaking on BBC Radio Leeds this morning about the spiralling cost of childcare.

I work with many families helping them to work out new and different ways to balance their work, life and childcare costs.

Full-time childcare costs working parents on average across Britain £722 a month, with prices lowest in the north-west (where childminders typically charge £630 a month for 45 hours a week), and highest in London (where £1,010 a month is the norm). When you add in commuting costs, it’s not surprising that many families decide it doesn’t make sense financially for of them to work.

So what can you do to cut your childcare costs?

Here are some simple ideas to ponder.

Ask grandparents to help

Grandma and Grandad are ideal carers as they have a wealth of experience, and huge amounts of patience and of course adore looking after their grandchildren. But you do need to make sure that they are happy with helping you out and you need to be clear on the hours you ask them to care for your kids and you need to make sure you talk about your rules around watching TV, eating sweets and making healthy food choices to avoid falling out with them!

Grandparents provide the majority of childcare for 36% of UK families, and 97% are unpaid so make sure that you recognise the enormous contribution they make to your family to avoid building up their resentment. If you want to pay your parents for their time and effort you will turn them into employees, which has tax implications.

I was very blessed that my Mum and Dad looked after my two kids when I went back to work as a teacher 2 days a week when they were little.

Grandparents under state pension age who look after a child under 12 can now apply for national insurance credits towards their state pension, using HMRC form CA9176 (PDF).

Change your working hours and think out of the box.

You can take reasonable time off to deal with an emergency involving your child, and after a year’s employment you have the right to 18 weeks of unpaid parental leave but one suggestion I make with the parents I work with, is to ask to work unusual hours or some longer and some shorter days so your partner is free to look after your child.

This is often called “Shift Parenting”

You could co-ordinate it so that you avoid rush hours or ask to work from home some days.  This can also cut down travelling time to your childcare provider, and means you will pay for fewer hours’ childcare.

If you work part time, choose your days carefully – some nurseries offer cheaper rates on days when they are not as busy.

Get help from your friends

Look after a friend’s child when you’re not working, and ask your friend to return the favour for a short period of time. Friends don’t need to register as childminders to do this as long as no cash exchanges hands but of course make sure you are TOTALLY happy with their ways of bringing up their children and yours too!

You should, however, learn first aid (the Red Cross runs excellent courses on first aid for children and babies) and take out public liability insurance, in case a child has an accident in your home. Alternatively, draw up a contract between yourselves absolving each other of liability if an accident occurs to be really on the safe side.  This is also a good idea if you share a nanny with a friend.

A live-out nanny costs up to £500 a week and you must pay tax and National Insurance on their behalf, so even a nanny share can be expensive. In contrast, an au pair will work 25-30 hours a week for as little as £65, along with food and board. Use the British Au Pair Association’s directory to find a local au pair agency.

Make the most of free early years care

Three- and four-year-olds are entitled to 15 hours of free childcare each week, which could be worth up to £180, for 38 weeks of the year.

However, many registered childminders can’t participate – only those who are specially accredited and on an approved childminding network, so choose your childminder with this in mind or be prepared to move your child to a participating nursery later.

Find eligible childcare providers through your local Family Information Service.

Take advantage of tax breaks

Employers can offer childcare vouchers (PDF) to parents of children aged under 15. These allow you to pay for childcare before tax and NI deductions are made from your salary, so you effectively save an amount equivalent to those deductions of almost £1,000 if you are a basic rate taxpayer and take your full entitlement.

Finally, if your household income is £26,000 or less, check whether you’re entitled to child tax credits.


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