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Changes to Childcare Incentives

Today, we’re diving into a topic that holds immense significance for families, employers, and society as a whole: the government’s contribution towards childcare costs. Finally, we see the government stepping in to offer significant benefits, primarily in the form of financial relief for parents and an increased workforce for employers alike. 

The government’s support for childcare costs goes beyond mere financial assistance; it plays a pivotal role in shaping various aspects of our society. By alleviating the financial burden of childcare, it enables parents to pursue work or educational opportunities.

Last year’s reports indicated that 13% of the UK population were not actively seeking employment. Presently, this figure has slightly declined to 12.8%. Despite this gradual decrease, one contributing factor to its persistence is the challenge parents face in affording childcare expenses, leading some to opt for caring for their children at home themselves. 

From April, parents will hopefully be encouraged to return into work with the government’s plans coming into fruition to support parents’ childcare costs.

The free childcare incentives are available for approved childcare, which is childcare provided by a:

  • Registered childminder, nanny, play scheme, nursery, or club 
  • Childminder or nanny with a registered agency 
  • Registered school  
  • Home care worker working for a registered home care agency. 

How will it work?  

Currently, parents of three to four-year-olds can access 15 hours of free childcare weekly, or 30 hours if both work and meet minimum wage criteria. From April, working parents will be able access 30 hours of free childcare support with children aged two and above up until they start school for 38 weeks of the year. In September, this will apply to parents with children 9-months and above.  

Below, we have broken down the full plan:  

Age Group Type of Family Apr 2024 Sep 2024 Sep 2025 
Age 3-4 All Parents 15 hours 15 hours 15 hours 
Working Families 30 hours 30 hours 30 hours 
Age 2 Families Receiving Some Additional Government Support  15 hours 15 hours 15 hours 
Working Families 15 hours 15 hours 30 hours 
Age 9-23 Months Working Families Not available 15 hours 30 hours 

To help implement this initiative, the government intends to significantly raise the hourly rate paid to providers for delivering the current free hours available with £288 million in additional funding between 2024-2025.  

Additional Support  

Local authorities in England will be allocated £289 million to enhance wraparound childcare services in schools for two academic years starting from September 2024. This funding aims to facilitate parents’ ability to work regular 9-5 hours without the need to retrieve their children from school at the standard closing time. 

Our People and Culture Manager, Eleanor Taylor, believes the changes will massively support parents who want to work:  

‘For parents to be able to come back into the office knowing that their wage isn’t just there to cover childcare is a step in the right direction. We look forward to seeing how the full rollout over the next few years will benefit parents and employers alike.’ 

Contact Eleanor Taylor today at [email protected] to learn more about how we can support your business objectives while prioritising the well-being of your workforce.  

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