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Chronicle Live
Chronicle Live
National
Elly Rewcastle

Budget 2023: Childcare help changing to cover one and two-year-olds

Parents are expected to gain a further helping hand with rising childcare costs when the Chancellor delivers his Spring statement today.

At present, the UK has some of the highest childcare costs in the world.

The average annual cost of a full-time nursery place for a child under two in Great Britain is now a staggering £14,836, according to a report by the charity, Coram. Such high costs are freezing parents out of work as wages do not cover care.

But what is the Government doing to support parents already? And what will change in today’s Budget announcement?

Read more: Budget live: Chancellor Jeremy Hunt to announce measures that aim to boost the economy

What childcare support is currently available?

In the UK, three- and four-year-olds are entitled to some free childcare, though this differs depending on where they live. In England, all three- and four-year-olds are entitled to 15 hours of free childcare per week in term time or 38 weeks a year.

Meanwhile, children of working parents are entitled to 30 free hours of childcare per week, however, parents must earn at least £152 per week on average to qualify. Free hours must also be delivered by officially-registered providers, such as nurseries, registered childminders or nannies, playschemes or schools.

Two-year-olds in England are also eligible for 15 hours of free childcare under certain circumstances, for instance when their parents can claim Universal Credit.

There is also a tax-free childcare scheme for parents to take advantage of, whereby the government will contribute £2 for every £8 paid by parents up to a maximum of £2,000 per child per year. This money must be used for approved childcare and can be combined with free childcare hours if parents are entitled to them.

Parents under 20 in England, who are at school or sixth-form, can also receive weekly payments under the Care to Learn scheme. They can get £160 per child a week.

What childcare changes are expected to be announced in the Budget?

Chancellor Jeremy Hunt is expected to announce changes that will help parents to reduce the cost of childcare in today’s Budget. It is believed that free childcare currently available to working parents in England with three- and four-year-olds will be expanded to cover the support for one and two-year-olds also.

Families on Universal Credit are also set to receive their childcare support up front instead of paying first and claiming it back. At the moment, parents on Universal Credit can claim back up to 85% of childcare costs back, which is equivalent to a maximum of £646.35 for one child or £1,108.04 for two or more children per month.

At today’s Budget, this maximum amount is also due to rise. According to the Institute for Fiscal Studies, the change could benefit “tens of thousands” of families.

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