Government vows to cut cost of childcare by at least £2,000 a year

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Childcare

The Government has vowed to cut the cost of childcare for working mums, with the coalition considering a scheme that would allow families to lop thousands of pounds off their childcare bills.

Details are still being thrashed out, but one proposal likely to approved is allowing families to claim up to £2,000 per child every year from their tax bills, in order to help cover the cost of childminders and nurseries.

This measure would not be means-tested, and would replace the current voucher and allowance system. In effect, it would mean that working mums become entitled to a flat-rate tax allowance.

British families face some of the highest childcare bills in the world, with recent figures revealing that an average mum with one child and a full-time job needs to work four months just to break even.  Many mums with two or more children conclude that it is not worth their while returning to work at all at present.

These changes have been announced in the week that the government cut child benefit for over one million families where a single earner is paid more than £50,000 a year – including many families which have a mother at home looking after the children.

toddler childcareIf you’re not sure how the child benefit cuts will affect you, see our child benefit Q&A section. If your family is affected by the child benefit cuts, see our guide on how to keep your child benefit.

Critics have complained that the government’s proposed new £2,000 tax break does nothing to help the interests of the 1.2 million parents who choose to stay at home to look after their children.

But whether you are a full-time parent or a working mum or dad, there are ways you can boost your childcare budget right now. Make sure you take full advantage of tax credits, childcare vouchers and free childcare as it can make a real difference to your family finances.