Childcare is one of the biggest costs faced by parents today.
A full-time nursery place now costs, on average, £14,030 per year. This is almost £1,200 per month. But help is available.
The government provides free childcare hours to eligible parents. We're digging into how this scheme works, who's eligible and when, and how to apply.
Note: This article is about the schemes available in England. Alternative (but similar) schemes are available in Scotland, Wales, and Northern Ireland. Check your local government website for more details.
Working parents can apply for up to 30 hours per week of free childcare
If you're a working parent, you can apply for 1,140 hours of free childcare per year. This works out as 30 hours per week during termtime (38 weeks of the year). You may be able to spread these hours out differently if your childcare provider can support this.
You'll need to meet certain criteria to be eligible
To be eligible for free childcare if you're working, the child you claim for must usually live with you. Additionally, you (and your partner, if you have one) will need to:
- Have a National Insurance number. If you don’t have one or can’t remember it, you can check it online or apply to get a National Insurance number if you’ve never had one.
- Expect to earn at least £183 per week over the next three months (less if you’re under 21). This is the equivalent of working 16 hours per week on the National Living Wage. If you have a partner, you must each expect to earn at least this much.
- Have an adjusted annual net income under £100,000. This is your income before tax, but after deductions like Gift Aid donations and pension contributions. It applies to your individual income, not your household income. If you or your partner (if you have one) earn over £100,000, it’s important to check your adjusted net income to work out whether you’re still eligible for free childcare.
Eligibility also depends on your immigration status. You will need to have at least one of the following to be eligible for free childcare:
- British or Irish citizenship.
- Settled or pre-settled status (you may still be eligible if you’ve applied but don’t have a decision yet).
- Permission to access public funds as part of your residency. Your UK residence card will confirm if you can do this.
If you're not eligible as a working parent, you may still be able to get some free childcare hours
If you're not eligible for free childcare as a working parent, you may still qualify for the free early education entitlement (FEEE) scheme. This scheme provides free childcare for:
- Two-year-olds whose parents receive certain benefits.
- All three- and four-year-olds.
Under the FEEE scheme, you can claim up to 570 hours of free childcare per year. This works out at 15 hours per week during termtime, or approximately 11 hours per week if spread across the whole year. This scheme is managed by local councils, so check with yours or speak to your chosen childcare provider for more details.
How many hours you can claim depends on your child's age
The free childcare hours scheme is being expanded to include children aged nine months to four years old. Because this expansion is a huge undertaking, it's being completed in phases.
Currently, you can claim:
- 15 hours per week for children aged two to three years old.
- 30 hours per week for children aged three to four years old.
From 1st September 2024, you will be able to claim:
- 15 hours per week for children aged nine months to two years old.
When the scheme expansion is complete in September 2025, you will be able to claim 30 hours of free childcare per week for children aged nine months to four years old.
You can apply for free childcare hours online
To get the free childcare hours you're eligible for, you'll need to set up a childcare account online and apply for a code to give to your childcare provider.
When to apply depends on your child's age. You can apply now for:
- 15 hours per week for children who are already nine months old (but their free hours won't start until 1st September).
- 15 hours per week for children who are already two years old
- 30 hours per week for children who are already three or four years old
If you can't apply now, then when you can apply will depend on when your child becomes eligible for free childcare. For example:
- They're turning nine months old and are eligible for free hours for the first time.
- They're turning three, or the scheme expansion means they qualify for more hours.
- You're starting work or returning to work after maternity, paternity or parental leave.
You'll usually apply for free childcare hours during the term your child becomes eligible for them. Then, the free hours will start the following term. So, for example:
Let's say your child turns nine months old in November 2024. You'll be able to apply for 15 hours per week of free childcare for them from September 2024. The free hours will then start in January 2025.
Once you're receiving free childcare hours, you'll need to re-confirm your details every three months. This is so that if your circumstances change, your eligibility can be re-assessed.
Other schemes can provider further help with childcare costs
Even with the help of free childcare hours, parents working full-time may still be left with a sizeable bill each month. But there are other schemes that can reduce costs even more:
Tax-Free Childcare
Tax-Free Childcare is a government scheme. For each £8 you pay into your online childcare account, the government adds £2. If you’re eligible, you can receive up to £2,000 per year, or more if you have a disabled child. You can use Tax-Free Childcare alongside free childcare hours. You can also use it once your child reaches school age to help with the cost of wraparound care like before- and after-school clubs.
Child Benefit
Child Benefit is a cash payment made to eligible parents. It's worth £25.60 per week for the oldest child in your household and £16.95 per week for each younger child you have. It's designed to help towards the cost of having children. So, you could spend it on childcare fees if you choose.
Extra help for people on Universal Credit
People on Universal Credit can claim back as much as 85% of their childcare costs, up to a maximum of £1,014.63 per month for one child, or £1,739.37 per month for two or more children. You can't use Tax-Free Childcare if you already get help with childcare costs this way. If you do, it could affect your overall benefits entitlement.
Sources
Helen is a personal finance editor who’s spent 11 years (and counting!) in the finance industry. She creates content on everything money with the goal of getting people thinking – and talking – about their finances in ways they may not have done before.
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