The cost of childcare: what can be done?

By Helen Gradwell

The cost of childcare is a real problem for many parents at the moment. If they don't pay for it then they can't go to work - and many have mortgages that need (or demand) two incomes. Many parents are forced to choose between paying the high cost of childcare or staying home and getting 'locked out' of the workplace.

The Telegraph reports that sending just one toddler to nursery can take up a third of a full-time wage. Average nursery fees are nearly £15,000 per year. In fact, it's got to the point where 41% of parents are paying as much for childcare as they are for their rent or mortgage.

And the Telegraph predicts that this situation is set to get worse, because high earners will soon lose their child benefit.

What can be done?

Christian Guy, the managing director of the Centre for Social Justice think tank, suggested that "fostering informal child care networks, encouraging child-minding circles and helping parents to work during school hours" could be really beneficial to parents. He added that there should be less 'red tape' around the provision of childcare.

The Deputy Prime Minister, Nick Clegg, has announced that all employees should have the right to request flexible working (i.e. it shouldn't just be limited to parents). He believes that 'normalising' flexible working - including working part-time or from home - will help to cut the cost of childcare.

As it stands, you have the right to request flexible working, but your employer doesn't have to fulfil this request.

There are also a number of government schemes that parents could take advantage of, such as:

• If your child is three or four, they're entitled to fifteen hours of free early education each week (for 38 weeks per year). This includes nursery, play groups, pre-school and child-minders, among others.
• You can contact your local Family Information Service to see if your two-year-old is entitled to any free early education.
• You might be entitled to claim childcare vouchers from your employer. These vouchers are not taxed, so you can make more of your wage go straight towards childcare. Use this calculator to see whether you could be better off using childcare vouchers.
• On the other hand, you may be able to claim extra tax credits. Click here to see whether you'd be better off claiming tax credits or childcare vouchers.
• If your combined salaries amount to over £50,000 (the amount at which you lose your child benefit), one of you may want to consider working part-time to push your household below the threshold. This would obviously involve weighing up the money you'd lose against the money you'd save.
An expert from All About Money added: "Childcare can take up a lot of your budget. If you have unsecured debts to pay too - like credit cards and personal loans - this can complicate the situation. By seeking the appropriate help with your debts, you could free up funds to put towards childcare."

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