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Save money on childcare

Save money on childcare

Childcare makes up a substantial amount of the costs of going to work for families. The average family with one preschool child spends £300 per week on childcare, which, when you take off holidays, works out to be over £12,000 per year. For families with two or more young children requiring childcare arrangements, this can increase significantly, and often it means that families are better off financially with one parent staying at home instead of returning to work, after having one or subsequent children.

Childcare vouchers

Many employers are enrolled in the childcare voucher scheme, which entails parents to opt in to buying vouchers directly from their gross salary, and thereby saving money on tax and national insurance. The scheme allows each parent to save £55 per week on tax by purchasing vouchers, so if both parents are working and opt in to the scheme, the savings will be £110 per week, which amounts to almost £4,000 per year (accounting for holidays). The childcare vouchers count as payment and almost all childcare providers accept these as part or full payment for their childcare provision.

Utilising family

Family and friends are a good source of childcare, and it’s estimated that 70% of working families have some support from grandparents or other relatives with regard to childcare, with some grandparents looking after their grandchildren on a full-time basis for free or a very low cost. Utilising the services of grandparents or other relatives, or even good friends, particularly over short periods, such as being around to pick up the children from school if you have an occasional meeting or business trip, is advantageous, especially if you don’t otherwise employ a child minder or have wrap-around nursery provision, as it saves having to organise that, and many childcare providers don’t have the ability to provide an ad-hoc service.


If you have two or more small children (preschool age) and/or work shifts or odd hours, such as in nursing or something like that, then a live-in nanny might be the answer. They are paid on an hourly basis and will generally live in your house, so they will be flexible around your shifts (within reason) and will also be cheaper to hire due to the living expenses. A nanny will cost from around £11 per hour, all inclusive, and you will be responsible for registering and paying their PAYE tax and national insurance, and any other costs.

Tax credits

Tax Credits pays out for childcare if you’re a working family that is eligible to receive Working Tax Credits with a single parent working 24 hours or more per week, or a couple both working 16 hours per week, under a scheme called Childcare Element of Working Tax Credit. You can check out whether you would be entitled to help on the entitledto website. Tax Credits typically pay out 70% of the cost of childcare, up to a maximum of £140 per week.

Free childcare

3 and 4 year olds are eligible for 15 hours per week of free childcare, in a setting that accepts the government funding for this. There are also many government-funded summer camps, to help with the costs of childcare for school-age children during school holidays.



Do you have any tips when it comes to saving money on childcare? Let us know below!

2 thoughts on “Save money on childcare”

  1. I have two children under 5 and The child care costs are horrendous thanks for all the tips I will look into a couple of these that we don’t already access, thanks

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