Re-enter the Workforce: Understanding UK Childcare Funding Options

In April, the UK government introduced new childcare funding options to help parents re-enter the workforce. Parents of children as young as nine months can now apply for 15 hours of free childcare. This scheme aims to support parents in balancing work and childcare responsibilities, but there are concerns about the availability of staff and childcare places.

The Challenge of Returning to Work

For many parents, returning to work after having children is a significant challenge. One of the biggest hurdles is finding affordable and reliable childcare. Many parents, especially mothers, may find it difficult to re-enter the workforce without proper childcare options. This not only affects family income but also impacts career progression and long-term financial stability. The new childcare funding options are designed to alleviate these challenges by providing more support for working parents but what does this mean for you? Let’s take a look at the funding options available and what your family could be entitled to.

What Free Childcare Can I Get?

The UK government is rolling out additional help with childcare costs in stages. Here’s a breakdown of what is available:

For Working Parents:

• From April 2024: 15 hours of free childcare per week for two-year-olds.
• From September 2024: 15 hours of free childcare for children aged nine months to two years.
• Currently Available: 30 hours of free childcare for three and four-year-olds.
• From September 2025: 30 hours of free childcare for all children under five.

Eligibility:

• Parents must earn more than £9,518 but less than £100,000 per year to qualify for the new hours.

For Those on Certain Benefits:

• Currently Available: 15 hours of free childcare for two-year-olds.
• Currently Available: 15 hours of free childcare for three and four-year-olds.

If You Don’t Work:

• You may still be eligible for 30 hours of free childcare if your partner works or if you receive certain benefits.

How Do Working Parents Apply for Free Childcare Hours?

Parents should apply before the start of the term when their child will be eligible. Applications for parents of children from nine months to 23 months have opened for the September term. Remember to reconfirm your details every three months to ensure your eligibility remains unchanged before the term begins.

Once approved, you’ll receive a code to give to your officially-registered childcare provider. Free childcare hours are designed to be used over 38 weeks of the year during school term time. However, some providers may offer to stretch the hours over 52 weeks if you use fewer hours per week.

What Isn’t Covered by the Free Childcare Hours?

While the government is increasing the hourly rate it pays childcare providers, this rate often doesn’t cover the full cost of childcare. Some providers may charge for extras such as meals, nappies, sun cream, or trips. According to the Department for Education, all additional costs are voluntary, and parents should be informed that they can provide their own food and supplies to avoid extra charges.

How Expensive is UK Childcare?

The average cost of full-time nursery care (50 hours a week) for a child under two in Britain is expected to be £15,709 in 2024. This represents about 45% of the average pay for a full-time worker in the UK. Costs can vary significantly depending on where you live.

Are There Enough Childcare Places?

By September 2025, an estimated 85,000 more childcare places and 40,000 extra staff will be needed. A National Audit Office report highlighted significant uncertainties regarding whether nurseries and childminders can deliver the plan, especially after the cancellation of a £35 million pilot scheme.

The availability of nursery and childminder places has worsened across the UK. In 2024, fewer than a third of councils have enough spaces for under-twos, down from 42% in 2023. To address the shortfall, the government is offering a cash incentive of £600 for new childminders (£1,200 for those joining via an agency).

What Childcare Help is Available in Scotland, Wales, and Northern Ireland?

Each region of the UK has different schemes for free childcare:

• Scotland: All three and four-year-olds are entitled to some free childcare.
• Wales: Similar to Scotland, with additional specific schemes.
• Northern Ireland: Also offers free childcare for three and four-year-olds, but operates its own schemes.

What Other Financial Help is Available for Childcare Costs?

Parents may be entitled to additional support, including the UK-wide tax-free childcare scheme. For every £8 you pay into an online childcare account, the government adds £2 (up to £2,000 per child per year, or £4,000 for disabled children). Parents who qualify for free childcare hours can also benefit from the tax-free scheme which can also be used for sports clubs and playschemes.

The Care to Learn scheme offers further help to student parents who are under 20 at the start of their course. Additionally, the government has a childcare calculator to help compare available schemes.

Moving Forward

These new measures aim to support parents in balancing work and family life. Though challenges remain in ensuring adequate availability and affordability of childcare services, it’s a positive step towards helping parents back into the workplace and encouraging them to stay there. For more information on what childcare options you could be entitled to the government website has a childcare calculator, to help compare available schemes.