Childcare for my 3-year-old is supposed to be free – but I still have to pay £3,400 a year

WHEN Kendall Platt’s daughter Arwen turned three years old, she couldn’t wait to make the most of free government funded childcare. 

Once kids celebrate their third birthday, they are eligible for 30 hours free a week. 

However, it can be difficult for parents to find a nursery that accepts the scheme, as Kendall quickly found out. 

The 35-year-old self-employed gardener, who runs Adventures With Flowers, could only use half the funding at Arwen’s nursery, which was attached to a local school. 

Instead of being funded in the afternoons she was told that she had to pay a £13 daily top up – costing the family £3,380 extra a year. 

“We decided not to do that every day because it was going to cost us more money,” Kendall says.

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"Because of the cost, Arwen only attends for three days a week.

“I don’t know why the school doesn’t offer all the hours. It seems insane,” Kendall says.

As well as Arwen missing out on time at nursery that she is entitled to, Kendall has less time to work.

Kendall, from Berkshire, is one of many parents being failed by gaps in childcare funding that leave many new mums and dads unable to go back to work or drowning in debt. 

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Most financial support for childcare costs does not kick in until the child is two or three, and those on benefits must pay for childcare upfront before reclaiming back some of the cost in arrears – an impossible task for those struggling to save.

By the time Government help kicks in, it is often too late, or as in Kendall’s case, hard to access. 

Experts believe the problem is only going to get worse with rising inflation.

The average cost of childcare for a two-year old rose 2.5% last year. It now costs parents an average of £138.70 a week for a part-time, 25-hour place. There is no funded help available from the government at this time.

“For too many families the system simply isn’t working, and they are left

“Many parents, up and down the country, will be locked out of work or struggle to make ends meet as childcare prices continue to go up and the availability of places goes down,” says Ellen Broomé, managing director of chidren’s charity Coram, which collates childcare cost information.

“We are disappointed that amid an ongoing cost of living crisis, and off the back of a pandemic which has severely impacted children’s life chances, the Government has again refused to review childcare funding and availability.”

Too confusing, and not soon enough

Nursery providers say that the schemes offered to help with childcare costs are confusing and the rates offered by the government are too low.

Ceri Smith, head of policy and campaigns at single parents’ charity Gingerbread, says the system is “hideously complex” and kicks in too late for many.

Parents must wait until their children are two, or even three, to access Government-funded childcare. They are often charged fees on top of the ‘free hours’ that they have waited to access.

Sharon Birch, who runs Hartlepool nursery Footprints Learning for Life, says that nurseries have to charge more for younger children, because they subsidise the fixed fees paid for funded children.

Hartlepool pays her nursery £4.34 an hour to care for children entitled to Government funding.

“It doesn't go anywhere near covering the costs,” she says.

“How can this be sustainable?”

New thinking needed

Experts in the sector want a joined-up approach to childcare funding, targeting the parents who need it most and closing the childcare gap for the newest mums and dads, who are paying the most but receiving the least help.

Coram wants a reform of Universal Credit to stop it locking parents out of work.

This would include upfront benefit payments for childcare so that families do not get into debt.

Smith, at Gingerbread, says that funded hours for children need to kick in earlier, too.

Birch, at Footprints, says that the Government needs to put childcare funding on a par with that offered to schools.

This would bring down the cost for the youngest children, whose fees subsidise the older ones.

“You have to give every child the best chance in life. And the only way you're going to do that is invest in the early years,” she says.

Mind the childcare gap

From Birth

Tax-free childcare

Available to: Families where there is no single income over £100,000 but where earnings are more than £142 a week. Both members of a couple must work to qualify.

What is it? A 20% government top up added to money put into a special account to pay for childcare, with a maximum benefit of £2000 extra per child, per year. The amount is larger if your child is disabled.

How do I claim it? See the government's wesbite to open an account.

Universal Credit childcare costs

Available to: Families earning around £40,000 or less.

What is it? 85% of your childcare costs repaid to you in arrears up to a maximum of £646.35 a month for one child or £1,108.40 monthly if you have more than one child.

How do I claim it? Start here.

From two years old

Both schemes above apply but some people are also eligible for:

15 hours free childcare

Available to: Families on a low income, or in certain other circumstances such as if a child has special needs. 

What is it? 15 hours of childcare from an approved provider every week funded by the government, which you can top up with extra hours using the schemes above or your own money.

How do I claim? See the full list here for eligibility and then contact your local council.

From three years old

As well as the schemes above, parents of three to four-year-olds are entitled to:

30 hours free childcare

Available to: Families where both parents work (if a couple) or one if a single parent, earning a minimum of £142 a week, and a maximum (per person) of £100,000 a year.

What is it? 30 hours of childcare from an approved provider every term time week funded by the government, which you can top up with extra hours using the schemes above or your own money.

You can use the hours over a longer period including the school holidays if you spread them out.

How can I claim? Start here.

Once school starts

Parents are still entitled to tax-free childcare until 11, or later if a child is disabled, and  can get help with costs for childcare from universal credit up to the age of 16.

Yesterday, April 14, the benefits for parents increased – we reveal by how much and when you can expect to see it.

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Here's a full list of other benefits that have risen yesterday, including Universal Credit.

And the state pension has also been increased – find out more.

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