They’re the future, after all!
The average British working family spends more than a quarter of its disposable income on childcare. This takes care of 27 per cent of their net income. This can be a problem for those families from all walks of life.
Vidhya Alakeson, deputy chief executive of the Resolution Foundation and joint author of a recent report on the cost of childcare has said: “This is a serious concern because increasing the level of female employment is one of the key routes through which family living standards have increased. We need major change in our childcare system to ensure work is always worthwhile – and working more hours or a pay rise results in higher take-home pay.”
There’s a wonderful scheme called ‘Eligible’ Childcare, and you can receive help with costs from either the government or your employer. The problem is this rules out family members, unless of course they are a registered childminder. It’s important to remember, however, they must look after one non-related child as well as yours in their own home. In this case you will qualify for ‘Eligible Childcare’.
There are pre-school childcare listings contained in the free online directory, Directory Shop. Take a look online today.
If both parents are working, and if the second income earner in the middle income bracket earns £12 an hour, then they have a good incentive to work for the first 13 hours. This will increase family income by a little more than £4,500 annually. The problem comes when the second earner crosses this threshold and suddenly they find themselves penalised as the cost of childcare takes up a large portion of additional earnings. As a result the working couple are no better off!
Parents struggling to cope with childcare costs could borrow up to £10,000 in a scheme being considered by Downing Street. The plan, backed by senior figures in the Treasury, would take the form of a loan similar to those offered to students, and could be a big help to working families everywhere.
Independent think-tank, the Social Market Foundation (SMF), put forward the proposal to ease the burden for British parents, who are forced to choose between giving up work or spending more than a quarter of their income on childcare. This will hit harder as the cost of living continues to rise.
The child benefit cuts made by George Osborne are determined by taxable income, rather than gross income. Individuals can reduce this taxable income by putting more money into a works pension. Obviously this would reduce their take-home monthly salary, but it would also reduce the amount of child benefit being taken back by the Government. You can also put money into childcare vouchers which would help further. The move could save many parents earning between £50,000 and £60,000 from having their child benefit payments cut. Someone on the £60,000 maximum could pay an extra £10,000 into their pension and retain all childcare benefits.
Families need to ensure they claim for every possible benefit offered by the government. Don’t forget the free business listings, Directory Shop, which carries information on a variety of topics to help everyone!
Leyla Mehmet
