Clarity on the Government’s response to the Childcare Voucher petition


It has been said that Tax-Free Childcare (TFC) is fairer and better targeted than vouchers, but this doesn’t take into account that families would lose all support under TFC if one parent was not in work for any reason—this could be an unexpected job loss or having to stop working to look after an elderly relative. With childcare vouchers, the family would still receive support where they wouldn’t with TFC via the other working parent. If the childcare vouchers scheme closes to new entrants as planned, then even existing users would lose access if they ever changed employer.

The average family will be able to claim more support with childcare vouchers. TFC is often said to offer £2,000 of support, but this is based on a family spending a total of £10,000 a year on childcare, with £8,000 out of their own pocket. Most families cannot afford this. In fact, according to the Government’s figures, the average family spends £3,276 on childcare each year. This family would only receive up to £655 of support under TFC but could receive up to £1,866 with childcare vouchers.

It is also important to acknowledge that anyone who claimed TFC would lose access to any other working tax credits and universal credit, and these other benefits would still be available to a family using childcare vouchers.

It is also sometimes claimed that TFC is “fairer” to single parents, but single parent households could still be worse off with TFC. A basic rate taxpayer single parent would have to spend over £4,665 on childcare to be better off with TFC than with childcare vouchers. It is precisely instances like this that shows us the importance of keeping both schemes open.

People sometimes think childcare vouchers has restricted access, but the fact that you are receiving this email means that you are probably one of the well over 20 million employees of the 31 million in this country that can access vouchers. This includes everyone who works for any public sector body and any large employer. And this number is growing by the day. Even with the threat of closure over 1,000 new small and medium sized businesses sign up to join the childcare voucher scheme every month.

Hopefully you’ll be able to see why we think it is so important that we keep childcare vouchers open.

Computershare named in Top 30 Employers for Working Families

Computershare named in Top 30 Employers for Working Families

We’ve sponsored the Employers for Working Families Benchmark and Award since 2011. It’s something very important to us, given that providing childcare vouchers to help families with their childcare costs is one of our most popular salary sacrifice schemes, and we strongly believe in maintaining a healthy work/life balance. So we felt that it was about time we benchmarked ourselves against other companies, and we’re delighted to have been awarded a place in the Top 30 Employers for Working Families.

How does it work?

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A balancing act for families with National Work-Life Week

Families are at the heart of what we do at CVS, so we’re delighted to continue in our support of Working Families, a charity which works with parents, carers and employers to find a better balance between responsibilities at home and work. The charity’s annual awareness campaign, National Work-Life Week, will this year be running from 24-28 September, with firms across the UK encouraged to get involved.

Finding a balance between family life and work life is something most families will face.

Introducing a childcare voucher scheme, along with other family friendly initiatives such as flexi working, are just some of the options employers can look at to support team members in this situation.

In the current economic climate, it can be especially difficult for small and medium sized businesses to reward staff, when pay rises and bonuses are just not an option. Family-friendly policies and working arrangements are one way they can do this.

Childcare vouchers benefit working parents as they are non-taxable and national insurance exempt, meaning parents can potentially save up to £1,866 a year.

Employers will also save on their national insurance payments by operating a scheme, with potential savings of up to £402 per year for each employee who joins.

In the case of flexible working, benefits can be seen for both employers and employees alike. It is a way for employers to engage and develop a happier more productive workforce, especially in the case of busy parents who will be able to more easily meet their commitments at work and at home.

For more details about National Work-Life Week 2012 visit

Parents urged to act to protect their financial savings

Many parents may be unaware they are at risk of losing out on the highest level of childcare voucher savings unless they act now, and here’s why... Parents currently using childcare vouchers may be aware that last April the Government introduced new legislation lowering the savings limits for new joiners of the scheme.

This legislation had significant financial implications, particularly for those higher rate taxpayers who wished to sign up and make use of the savings.

For parents already on the scheme their level of savings was unaffected, but their existing level was only protected provided that they ordered childcare vouchers at least once in every twelve month period.

So many parents could now be in danger of losing out - unless they act quickly.

And it is not just higher and additional rate taxpayers who stand to lose out – see how this issue could affect you.

Higher or additional rate taxpayer

 If you are a higher or additional rate taxpayer who joined your employer's childcare voucher scheme before 6th April 2011, then while you remain eligible you have a right to a higher level of savings. This means you can receive up to £243 per month in childcare vouchers.

If you have ordered vouchers in the past twelve months, or do so now before the twelve months is up, then you will remain at this level for a further year. This will mean you are still able to make savings of up to £1,224* a year in tax and National Insurance payments if you are a higher rate taxpayer, or £1,516* a year if you are an additional rate taxpayer.

Basic rate taxpayer

For a basic rate taxpayer, you may also want to order childcare vouchers within this 12 month period to retain your protected rights. This means you will be able to receive childcare vouchers up to £243 per month if you ever become a higher rate taxpayer.

If you lose your protected rights then you can continue to receive childcare vouchers up to £243 per month, but ONLY while you remain a basic rate taxpayer. Remember, as a basic rate taxpayer you can still save up to £933 per annum in tax and National Insurance payments.

To order your vouchers, or if you would like any further information on this issue, then the team at CVS would be happy to help you. You can reach them on 0845 002 1111 (8am-8pm, Monday to Friday)

CVS launches ‘Let’s Get Kids Reading’ campaign for World Book Day

Today is World Book Day and we’ve launched a special campaign to help parents motivate and inspire their children to read. The ‘Let’s Get Kids Reading’ campaign has a dedicated Facebook page where parents will find practical advice, reviews and competitions – including the chance to win their child’s height in books! We surveyed our parents to find out how long they spend reading with their children and it’s gold stars all round with 51% half dedicating 25 minutes a day to the task. An enthusiastic 20% of parents are reading even more – clocking up an impressive 42 minutes a day!

Busy parents face a number of time pressures and it’s very positive to see that despite this, a majority are reading with their children regularly - with a quarter even managing over five hours a week!

This is great news, as research suggests that children who are read to on a regular basis before they start school are most likely to succeed, and it is thought to be a key predictor of educational success.

Speaking earlier this month, School Minister Nick Gibb said that reading books for just half an hour a day could be worth up to 12 months’ extra schooling by the age of 15.

A report by The Literacy Trust* into young people aged 8 to 17 has also shown a direct link to attainment, with 8 in 10 children who read over 10 books a month being above average readers, compared to just 3 in 10 of those who rarely read. 

Parents are the most important reading role models for children and young people, according to The Trust, with mums taking the lead. 67% of parents who read to their children are mothers compared to just 17% of fathers.

Our ‘Let’s Get Kids Reading’ page let’s you get involved – not only can you find out what other parents are reading with their children and read reviews of some of the top children’s books but you can enter our competition to be in with a chance of winning a stack of books, as tall as your child, to fill those shelves with!

Visit the page, and ‘like’ us today!

To read the competition T&Cs, please click here.

Daycare Trust research shows 6% increase in nursery costs

Daycare Trust’s Childcare Costs Survey 2012 was released today. The research, sponsored by Computershare Voucher Services, shows that:

  • hourly childcare costs for a child under two have increased by 5.8%; and 
  • costs for a child aged two and over have risen by 3.9%.

In the same year period, wages have only increased by 0.3%.

Daycare Trust’s research coincides with new HMRC figures which reveal that 44,000 fewer families are receiving help with childcare costs as a result of the Government’s cut to financial support in April 2011. This saw the childcare element of Working Tax Credit cut from 80% of costs to 70% - as a result, the average claim has fallen by more than £10 per week, costing low-income working families who receive it more than £500 per year.  

The survey, conducted between November 2011 and January 2012, asked all Family Information Services in Britain about the cost and availability of childcare in their area. Other key stats revealed that:

  • the average hourly childcare costs now exceed £100 for 25 hours in many parts of Britain
  • the average yearly cost for a child under two is £5,103.
  • Britain’s most expensive nursery recorded this year charged £300 for 25 hours care – £15,000 for the year.
  • Over half of local authorities said that parents had reported a lack of childcare in the last year.

Anand Shukla, Chief Executive of Daycare Trust said: “These above-inflation increases in the cost of childcare are more bad news for families, heaping further pressure on their stretched budgets as wages remain stagnant and less help is available through tax credits.

“Daycare Trust warned that the Government’s decision to cut tax credits would mean that some families found that they were no longer better off going to work once they had paid for childcare. The latest HMRC figures reinforce Daycare Trust’s fear that the loss of this vital lifeline is forcing families out of work and in to poverty.

“Today we are calling on the Government to reverse its self-defeating childcare tax credit cut, and to deal decisively with the childcare affordability crisis for parents by pledging to provide free childcare for all two year-olds by the end of the current parliament.

Daycare Trust’s survey highlights the ever growing gap between working parents and affordable childcare.

Employers can do their bit to support employees by making flexible working a reality and introducing childcare voucher schemes. Schemes are cost neutral for companies to run and allow a basic rate earner to save nearly £1000 per year on their childcare costs.

Computershare Voucher Services fully supports Daycare Trust’s recommendations for improving accessibility to affordable childcare. We have been particularly heavily involved in the plan to extend childcare vouchers to self-employed and encourage entrepreneurship; a proposal that has already seen some Government support.

There have been several articles covering the report which you can read here:

Childcare cost rises 'may make parents quit their jobs' – BBC News

Childcare costs rise by nearly 6% - The Guardian

Childcare costs survey: nursery fees rise by 6 per cent in a year – Nursery World