News story

More help with childcare costs for working families announced

The Prime Minister and Deputy Prime Minister today announced a scheme providing more help with childcare costs for working families.

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

Visiting a London nursery, the Prime Minister and Deputy Prime Minister discussed the new 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 two 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.

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.

Full detail on the new scheme is available from HM Treasury.

Published 19 March 2013