Childcare vouchers - the facts

Finance |

Childcare vouchers are a Government scheme aimed at helping working parents. Families save up to £2,391 a year by using childcare vouchers, while employers save up to £373 a year per scheme member.

Alison Chalmers, Company Director at Kiddi Vouchers joined us at My Baby Radio to answer questions on the issue.

How does the voucher scheme work?

It runs through a system called salary sacrifice. Parents can chose to receive childcare vouchers instead of part of their salary. So they can opt to give up to £243 a month of their salary and have childcare vouchers in their place. The childcare vouchers are free of tax and national insurance so they’re paying for their childcare out of pre-tax pay and that’s where they make their saving.

Are all parents entitled to it?

As long as they work and as long as they’re paid through Pay As You Earn. Their employer has to run a childcare scheme in order to qualify for it. Most employers are happy to do that when they hear the benefits as there’s a saving for them too.

What can the childcare vouchers be used for?

They can be used for allsorts of registered or approved childcare providers. For example nurseries, a registered childminder, nannies, au pairs, after school clubs and breakfast clubs.

They can be used for children up to age 15 as long as you can find a childcare facility for a child of that age.

How can people find out if they can use the vouchers with their childcare provider?

Normally a childcare voucher provider would do that for them. Most nurseries are very familiar with vouchers

If you’re using a childminder they may not be familiar with it. It means the carer gets paid from your childcare voucher provider rather than the parent.

As long as they get their money they’re usually quite happy.

What are the benefits of setting up a childcare voucher scheme for the employer?

They save up to £373 a year for every scheme member but there are softer benefits such as staff morale, making it easier to recruit parents and staff retention.