News story

Childcare costs scheme for working families announced by David Cameron

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Childcare scheme will be worth up to £1,200 per child, and will save a typical working family with 2 children under 12 up to £2,400 a year.

Prime Minister David Cameron and Deputy Prime Minister Nick Clegg today announced a scheme providing more help with childcare costs for working families.

Visiting a nursery in Wandsworth, the Prime Minister and Deputy Prime Minister discussed the Tax-free Childcare scheme with local parents.

Once fully up and running, the scheme will be worth up to £1,200 per child, and will save a typical working family with 2 children under 12 up to £2,400 a year.

It will be phased in from autumn 2015 and will ultimately be open to around 2.5 million families with children under 12. From the first year of operation, all children under 5 will be eligible, initially opening the scheme to 1.3 million families, and the scheme will build up over time to include children under 12.

Prime Minister, David Cameron said:

If Britain is going to succeed in the global race we must help those who work hard and want to get on.

Too many families find paying for childcare tough and are often stopped from working the hours they’d like. That is why we are introducing tax free-childcare, saving a typical family with two children up to £2,400 a year.

This is a boost direct to the pockets of hard-working families in what will be one of the biggest measures ever introduced to help parents with childcare costs.

Deputy Prime Minister Nick Clegg said:

I want to help every family to get on in life. Already we have created a million private sector jobs, put money back in people’s pockets by cutting income tax, and extended free childcare entitlements for pre-school children.

Delivering tax-free childcare is the next step to ensuring all families can work and get on. The rising cost of childcare is one of the biggest challenges parents face and it means many mums and dads simply can’t afford to work. This not only hurts them financially, but is bad for the economy too. This announcement of a £1bn investment in childcare will make sure it pays to work.

An extra £1,200 for each child will make a real difference to families who find themselves constantly worrying about how to juggle their family budget.  And extending support for working families on Universal Credit will make sure it is worth working extra hours even if you’re on low wages.

The government will shortly consult on the detail of the new Tax-free Childcare scheme, including on how employers could continue to play a role in supporting their employees with childcare costs within the new system.

Read full details of the new scheme on the HM Treasury website.