Working parents may be just one pay day away from missing out

Employers For Childcare is advising working parents, who think they may benefit from savings of up to £1,866 per year[1] towards the cost of childcare, to register for the Childcare Voucher scheme[2] before it closes to new entrants in April 2018 under Government plans.

Parents already using the scheme can continue to do so provided they do not change employer. Post-April, the Government proposes parents use the new Tax-Free Childcare scheme to help with the cost of registered childcare. While Tax-Free Childcare will benefit some parents, others run the risk of losing out if they do not take action now. A call to Employers For Childcare’s Family Benefits Advice Service (0800 028 3008) gives parents the information they need to make the right choice for their family.

Aoife Hamilton, Policy & Information Manager at Employers For Childcare said: “Employers For Childcare is warning all parents that, after February’s pay, there’s only one month left to join the Childcare Voucher scheme. We believe this call to act is necessary as two thirds (66%) of callers to our Family Benefits Advice Service helpline, who are paying for registered childcare, are better off using Childcare Vouchers, Tax Credits, or a combination of these, rather than Tax-Free Childcare. In today’s economic climate, what family can afford to miss out on annual savings of up to £1,866?

“We urge new parents and parents who pay any form of registered childcare (including breakfast and afterschool clubs, holiday schemes, childminders and day nurseries) to think about their current childcare situation and how that may change in the future, for example, will they reduce their working hours? Will they have another baby? Will they begin to use registered childcare, even if they aren’t doing so now? Thinking about this in six months’ time or a year will be too late as the Childcare Voucher scheme may have closed to new entrants. You can contribute as little as £1 a month to join Childcare Vouchers, giving you the full suite of options in the future including remaining in Childcare Vouchers, using Tax Credits or Universal Credit, or opting for Tax-Free Childcare”.

Turning her focus towards Employers For Childcare’s continued lobbying work, Aoife continues: “There is a small window of opportunity for Government to keep Childcare Vouchers open to new entrants, but that time is diminishing. Employers For Childcare continues to lobby Government at a local and national level to keep Childcare Vouchers open alongside the Tax-Free Childcare scheme so parents have a comprehensive package of support and choice when it comes to paying for childcare.  We urge all MPs to support working parents by signing an Early-Day Motion (EDM) calling for Childcare Vouchers to be kept open alongside Tax-Free Childcare.”

What can parents do now?

If you pay any form of registered childcare, or think you might in the future, find out if you would benefit from Childcare Vouchers by calling our Family Benefits Advice Service helpline on 0800 028 3008 or email  The team can complete a free, confidential and impartial calculation for you setting out which support your family is entitled to and how you can be better off.

What can employers do now?

Make sure your employees know the scheme is closing to new entrants in April 2018. Ensure all staff who want to use Childcare Vouchers have joined before April 2018 and that those who have temporarily opted out of the scheme are aware they can salary sacrifice as little as £1 to remain in it to future proof their eligibility (at least one salary sacrifice must be made in a 52 week period to ensure a parent can remain in the scheme).

[1] Two parents using the Childcare Voucher scheme, each saving £77.75 per month, over a one year period.

[2] The Childcare Voucher scheme enables parents to swap part of their monthly salary, tax and National Insurance Contributions free, for Childcare Vouchers. In addition to savings being made by the parents, the employer also makes a saving as the amount each parent swaps from their salary is also exempt from Employer’s National Insurance Contributions.