The Government is increasing funding for a new childcare scheme which will allow more two-year-old children to benefit from free childcare.
Double the number of two-year-olds will be eligible for free childcare from next year, the deputy prime minister has confirmed.
From next Monday 130,000 children will start receiving free childcare, which will increase to 260,000, or 40% in total, next September.
Children of parents earning less than £16,190 each year and receiving certain benefits will be entitled to 15 hours’ free childcare under the scheme.
Free childcare
The new £534 million Government scheme starts next week. This is only available for parents earning below the threshold and who already receive a benefit, such as income support, or for children in the care of a local authority.
Nick Clegg said in a speech that funding for the scheme would be extended by £226 million so more children can be included. This is an extension from the previous scheme which allows free early education for children aged three and four.
"From this time next year, we will extend that helping hand even further, doubling the number of youngsters getting a brighter start in life.
"Without this help, children suffer and the whole class suffers as teachers have to focus more of their efforts on children who are frustrated and left behind through no fault of their own,” he said.
Nursery school places
The Family and Parenting Institute has voiced concern over the plans. Although it welcomes them, it said nursery closures could mean there won’t be enough places available.
This is especially the case in poorer areas and Anand Shukla, chief executive of the charity, said a minimum of 108 nurseries across England have closed or were never commissioned but were supposed to be.
“Cost savings have driven nursery closures, and this approach reduces capacity in the system which will damage Government hopes of meeting its targets for provision of childcare for two-year-olds,” he said.
The cost of childcare
Childcare costs are one of the most expensive outgoings for parents and have risen by 6% in the past year, more than double the rate of inflation, according to the charity Day Trust Care.
The average nursery charge for a child under the age of two is now £4.26 per hour. A parent paying out for 50 hours would have a bill of £11,000 a year.
In the past 10 years the cost of sending a child aged two or under to nursery has risen by 62%. To avoid this many parents are relying on family members; 26% have asked grandparents to care for a child, while friends and neighbours provide a childcare network for 7% of families.
How to save money on childcare
There are already several schemes in place to help parents out with the cost of childcare. Childcare vouchers, for example, are available for all working parents and can save around £624 per parent, per year, for higher-rate taxpayers and £904 a year for those on the basic rate.
Employees sacrifice some of their salary in return for the vouchers which can go towards the cost of childcare. The savings come from the fact you won’t pay tax or National Insurance on this part of your salary. Check out Five ways to cut the cost of childcare for more.
Working parents can also benefit from up to £55 a week which is available through the Employer Supported Childcare (ESC) scheme, which around 5% of employers use.
Working Tax Credits are available to lower-income families where parents work at least 16 hours or more. These can help pay towards up to 70% of childcare costs, up to £175 a week.
There are also Tax Credits which are available to all parents with at least one child. You can find out more in our article How to renew your Tax Credits.
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