Help with childcare costs for working parents

With the rising cost of living, it is no surprise that parents on a low income are struggling to meet the high costs of registered childcare. The Government has recognised that this issue is creating an unnecessary barrier for those parents to obtain and/or return to work. As a result, a number of measures have been put in place to support working parents on a low income. 

Financial assistance may be available to cover up to 85 percent of childcare costs, charged by registered providers which can be accessed through Universal Credit. However, these payments were previously capped at £646 per month for one child and £1108 per month for two or more children.

From this month, these caps have increased significantly; payments of up to £951 per month can now be claimed for one child and £1630 per month for two or more children.  

The Government has also acknowledged that because financial assistance towards childcare costs (through Universal Credit) has historically been paid monthly in arrears, many parents have been prevented from initially obtaining or returning to work, due to the unaffordability of upfront payments required by childcare providers.

Working parents in this situation can now apply for financial assistance towards upfront childcare costs, allowing them to pay for one-month childcare costs in advance rather than in arrears.  

In addition to the above, parents of the following are also currently eligible for free childcare through Government funded early education schemes:  

• 15 hours free childcare for eligible 2-year-olds 

• 15 hours free childcare for all 3 and 4-year-olds 

• 30 hours free childcare for eligible 3- and 4-year-olds 

However, the schemes are in the process of being extended to include: 

• 15 hours free childcare for working parents of 2-year-olds from April 2024 

• 15 hours free childcare for working parents of children aged 9 months from September 2024 

• 30 hours free childcare for working parents of children aged 9 months from September 2025 

The current and extended schemes only apply to the school term time. So, the maximum number of free hours available applies to 38 weeks per year.

Although, depending on the availability of the registered childcare provider, the hours can be spread over 52 weeks of the year, if fewer than the total eligible free hours are taken each week during school term time.  

More information on help towards childcare costs for parents on a low income can be found here: https://www.gov.uk/get-childcare