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Back to Work – Your Childcare Options

For some, going back to work can be a daunting prospect after a long period of time off and leaving your child can be hard. But understanding the different financial help that is available can help you to make the right choice.  Our video will help explain some of the benefits and funding options available.

Posted in: Family

Just to be clear, this video is not meant to be taken as advice. Also, your individual circumstances are probably different from the examples we’ve shown. The information in this video is correct as at 6th April 2016.

Video transcript


One of the challenges many parents face after having a child is going back to work. Whether full time or part-time, leaving your child with a child minder or other registered childcare can take some getting used to.

And of course, when childcare is needed, going back to work brings financial implications with it too. Luckily, the government provides several initiatives to help out with the cost of childcare – and this cost varies in different parts of Britain.

One option is childcare vouchers which help working parents save money on their childcare. You buy vouchers with your salary before tax and National Insurance is taken off and then you use them to pay for your childcare. In fact, it’s how I partially pay some of my staff and how many parents pay me.

In simple terms, if you choose to get paid £100 of your pre-tax salary in childcare vouchers, you will save roughly £30 of Tax and National Insurance that you would normally have paid on that income. Now that’s worth it!

In fact, both parents can each claim the maximum available childcare vouchers for their individual salaries, increasing or even doubling the benefit. Higher rate taxpayers can claim less than standard rate taxpayers, but in all cases the vouchers can be stored up for when you need them.

However, childcare vouchers may not be the best option for everyone. Because parents can also claim up to 70% of the cost of childcare through tax credits, calculations for childcare are reduced by the amount of vouchers that you use. So, if you pay £150 in childcare but £100 of that is in vouchers tax credits only acknowledges £50 for your calculation. The hours you both work, your household income and other tax benefits you receive all affect the amount you can claim – and childcare vouchers will reduce it.

As a rule of thumb those on lower incomes may be worse off using vouchers, so with that in mind, it’s a great idea to work out which combination works best for your situation

However, good news, all three and four year olds from the UK are entitled to free Early Years Childcare Funding, from a registered provider.

These include nurseries, pre-schools and child minders and you can get a full list of these from your local authority.

Depending on where you live in the UK, your child will be entitled to a certain amount of funded childcare each week. The childcare must be spread out throughout the week during term times. So if you need extra childcare, you may need to pay the difference, but the Early Years Funding should shave off a nice amount.

For some, going back to work can be a daunting prospect, after a long period of time off, and leaving your child can be hard. But understanding the different financial help that is available can help you to make the right choice.

Government Funded Childcare

When choosing which childcare provider you want to take care of your child, you should bear in mind whether they qualify as a provider for the Early Years Education Funding. If you want to take advantage of the free funding after your child turns three years old they will need to be registered. Find out more about eligibility for the Early Years Education Funding.

To find out how Tax Credits can help with childcare costs read our guide to Tax Credits.

Many thanks to the Wishing Tree nursery in Brighton for letting us film on location.