From nanny sharing to apps: how to save money on childcare

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Make use of free childcare hours

For some parents, paying for childcare will be their biggest expense, and a struggle when other essential bills are soaring. The cost of a full-time nursery place for a child under two has risen from an average of £236 a week in 2018 to £274 this year, according to the latest figures.

So it is more important than ever to claim everything you are entitled to. Mandy Garner, a spokesperson for the jobs site WorkingMums, says: “We know that many parents are not claiming all the available support, whether because they find it too complicated or they simply don’t know about it. But with fees so high and continuing to rise, it can make such a difference to claim every bit of support you can.”

For example, some parents qualify for free childcare for two-year-olds if they receive certain benefits. In England, every parent is eligible for 15 hours of free childcare a week for three- and four-year-olds during term time, while working parents may be able to claim 30 hours of free childcare a week. To be eligible for the latter, you will need to earn a certain amount. (There are different schemes in Scotland, Wales and Northern Ireland.)

The free hours can be put towards the cost of approved childcare providers such as nurseries or childminders.

View image in fullscreenThe cost of a full-time nursery place for a child under two has risen from an average of £236 a week in 2018 to £274 this year. Photograph: Dominic Lipinski/PA

Claim tax-free childcare if you are working

Under the government’s tax-free childcare scheme, working parents can also receive some tax-free money towards the cost of childcare for children aged 11 or under. Parents can get up to a £500 top-up four times a year for each child towards the cost of childcare.

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Parents claiming the support must set up a government account. For every £8 parents pay in, the government adds £2, up to a maximum of £2,000 a year until a child is 11 – and up to £4,000 for disabled children until they turn 17. You need to apply for the scheme through the HM Revenue and Customs website.

Get help if you are claiming universal credit

Working parents on universal credit can claim back up to 85% of childcare costs every month. The most you can get back each month is £646 for one child and £1,108 for two or more children. To be eligible, you, and your partner if you live together, will need to be working or have a job offer. You need to have less than £16,000 in savings and be on universal credit to apply.

If you are unsure about what help is available, you can use the government’s childcare calculator to see what support you can get, as there may be different options for you. You can also find more information on the government’s Childcare Choices website.

Seek community support

Check your local authority’s family information services for guidance. It should be able to provide lists of registered childminders, nurseries, clubs and activities in your area.

Some councils have community nurseries that are run on a not-for-profit basis

Your local authority may have its own children’s centres that offer support in your area, too. These could include “stay and play” sessions for toddlers that are free or involve a small fee. You could also ask on your local Facebook and Nextdoor page to find out what is going on in your area.

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In some areas, parents have taken it upon themselves to try to do something about the situation. For example, the free app Fetching was set up by parents wanting to share the school run.

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Some councils have community nurseries that are run on a not-for-profit basis. They may have a waiting list but the cost can be hundreds of pounds a month cheaper than private nurseries. For information about these, search your local authority website.

Make use of cheap and free holiday activities

If you have an older child, ensuring they are cared for and entertained during the school holidays can be difficult. But there may be free activities and organisations in your local area that can help. Check out the Coram Family and Childcare website, which provides information on all childcare, including holiday clubs.

View image in fullscreenHave you considered holiday clubs for your children? Photograph: Janie Airey/Getty Images/Image Source

Community centres, youth groups and your local authority may run specific activities and trips away that are worth exploring. Schools may also have information about holiday and other schemes.

Nanny sharing

This year there has been an increase in nanny salaries across the UK, according to the Nannytax Salary Index. For example, in London the average cost for a nanny in 2021-22 was £3,317 a month, or £39,804 a year (the annual figures are based on a “live out” nanny working 50 hours a week, and these are gross amounts).

To reduce the burden, some families nanny-share, by dividing the nanny’s time between a few families or having them take care of both children at once. This way, the cost can be split.

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When you employ a nanny, you must register with HMRC as an employer.

Sites such as, Tinies and Koru Kids are worth searching for people in your area who may want to nanny-share.

Remember that you have responsibilities as an employer. The site Nannytax can help you work out how much tax and national insurance should be paid.

Grandparents, friends and family

View image in fullscreenCan grandparents help out with your childcare? Photograph: Westend61/Getty Images

Nurseries and nannies are too expensive for many families. But if you have parents, family or friends who are able to help, they can be a godsend.

Bear in mind that under the Childcare Act, anyone other than close family looking after your child for more than two hours a day between 6pm and 2am (babysitters, for instance), or for more than 14 days a year, outside the child’s own home, must be registered as a childminder. This involves having a criminal record check, taking a childcare course and paying an annual fee to Ofsted.

One little-known benefit of grandparents looking after grandchildren under the age of 12 is that they may qualify for national insurance credits, which count towards their state pension entitlement.

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