This, on top of the other impending changes in April, is contributing to the growing strain put on families in the UK.
Figures from the Daycare Trust show that the cost of a nursery place for children aged two and over has increased by 4.8% since last year; considerably higher than the 2.1% average rise in wages for the same period.
As ever there is a north-south divide, with childcare in London and the South East nearly £2,000 more expensive each year than in the North West – based on 25 hours of childcare per week.
The Daycare Trust’s figures also show that particularly in London, the cost of childcare means that many women are not returning to work, with 44% staying at home to care for their children.
Our own research last year showed that a third of working parents had debated whether it was worth returning to work at all because the costs of childcare would exceed their salary.
If your little bundle of joy has just arrived or your maternity/paternity leave is coming to an end, you may be faced with that decision. The first thing to do is find out whether your employer runs a childcare voucher scheme. It’s the equivalent of your employer giving you a much needed pay rise as you stand to save up to £1196* per year in tax and NI contributions through a voucher scheme which would help you keep up with fast rising childcare costs.
Don’t forget if you’re a higher or additional rate tax payer, or stand to become one in April, act now and sign up to childcare vouchers before 6th April to receive the maximum childcare benefit. You can read more on our website.
* based on a higher rate tax payer saving the full voucher value.