11 ways to cut your childcare costs

How much does childcare cost?

The average cost of sending a child under the age of two to nursery or to a childminder in Great Britain is:

Childcare isn't cheap, and while the government has promised more support, parents with young children may be caught in a situation where they can't afford to go back to work. In this guide, we explain ways to ease the pressure on your budget.

1. Get up to 30 hours free childcare

In England, all children aged three to four are eligible for 15 hours of free childcare or education, even if you don't work. 

You may be able to get an extra 15 hours (so taking you up to 30 hours of free childcare) a week if you're on a low income, as long as you and your partner earn at least the national minimum wage or living wage.

In some cases, families on certain benefits may qualify for help with younger children and may qualify for 15 hours of free childcare or education for two-year-olds.

The free childcare hours apply over term time which is 38 weeks a year, but some providers may allow you to stretch this to 52 weeks by using fewer hours per week.

Earlier this year, the government revealed plans in its Spring Budget to expand the 30 free hours scheme for working parents of children in England who are aged as young as nine months. However, the rollout will be phased and won't start until April 2024.

In Scotland, all three and four-year-olds are entitled to 30 hours free childcare a week during term-time. There is also a scheme for two-year-olds if you receive certain benefits and are on a low income. 

In Wales, all three and four-year-olds can get 30 hours of free childcare a week. The 30 hours is made up of a minimum of 10 hours of early education a week and a maximum of 20 hours a week of childcare.

If you're in Northern Ireland, three and four-year-olds get 12 and a half hours of free childcare per week during term time through a funded preschool place.

• Find out more: Spring budget childcare changes explained

2. Take advantage of tax-free childcare

Tax-free childcare is a government scheme that pays working parents a 25% top-up based on their childcare costs. So for every 80p you put in, the government will put in 20p — but there are limits. 

You can get up to £500 every three months (up to £2,000 a year) for each child looked after by an approved childcare provider (such as a registered childminders, nursery or nanny), sent via an online account. If your child is disabled this goes up to £1,000 every three months (up to £4,000 a year).

The following eligibility criteria apply:

• Both you and your partner, if you have one, must be in work (or be on sick leave, annual leave or parental leave) and earning at least national minimum wage or living wage for 16 hours a week.
• You can be self-employed. If you are, the earning limits don't apply if you started your business less than a year ago.
• You can't claim if you or your partner earn more than £100,000.
• Your child or children must be aged 11 or under (or 16 and under if disabled) and usually live with you.
• Adopted children qualify, but foster children do not.

You can get tax-free childcare at the same time as 30 hours free childcare but you can't get tax-free childcare at the same time as claiming working tax credit, child tax credit, Universal Credit (more on this below) or childcare vouchers. You should check which scheme you would be better off with using the government's childcare calculator.

• Find out more: tax-free childcare explained

3. Check if you can get tax credits or Universal Credit

Working tax credit and Universal Credit both have 'childcare elements', where the government gives you extra money towards paying for childcare.

With working tax credit, you can get up to 70% of what you pay for childcare, up to a maximum of £175 per week for one child, or £300 for two or more children.

To qualify for working tax credit, you and your partner - if you have one - must both work at least 16 hours a week. One of you can be out of work if you are entitled to carer's allowance, in prison, hospital or incapacitated.

Universal Credit is gradually replacing benefits, including tax credits. If you're already on Universal Credit, you can't apply for tax credits and the childcare element will be included with your overall payment.

Currently, you can get 85% of your childcare costs covered, up to a maximum of £646 a month for one child, or £1,108 for two or more children. But in the Spring Budget, the government pledged the cap would be boosted by this summer, taking the limit up to £951 for one child or up to £1,630 for two or more children. Eligible parents claiming Universal Credit will also be able to get help with their childcare upfront so that they can more easily pay their next set of costs. 

• Find out more:  check what you are entitled to using our working tax credit and Universal Credit guides

4. Don't forget about child benefit

It's not childcare specific, but every little helps - child benefit payments from the government are intended to help with the maintenance of all children in the UK, and they can help ease the strain of childcare costs.

In the 2023-24 tax year, you'll get:

• £24 a week or £1,248 a year for your eldest or only child 
• An extra £15.90 a week (£826.80) for any additional children.

You'll be paid child benefit until your child turns 16 - or until they turn 21 if they're in an approved form of education or training.

Child benefit is not means-tested. However, if you or your partner earns more than £50,000 a year, you'll incur a tax charge on the money you receive, which has to be paid via a self-assessment tax return. If you earn more than £60,000 a year, you'll effectively have to pay back all of the child benefit you receive.

Even so, it's still worth registering and just opting out of the payments, as you'll receive National Insurance credits while you're off work.

• Find out more:  check how much you're entitled to and whether you're eligible to claim using our child benefit guide

5. Consider nanny sharing....

A nanny is someone who comes to look after your child at your home.  

They will be entitled to national minimum wage, meaning a 25-hour week will cost you at least £260.50. As their employer, you'll also need to cover tax, National Insurance (NI) and pension contributions. 

So a nanny is not really a a cheap option, but if you have a friend or neighbour who is also looking to cut the costs of childcare, suggesting a nanny share might be the way forward. 

Websites such as childcare.co.uk and korukids.co.uk can help you find someone in your local area willing to be part of a nanny share arrangement. 

6. ...Or try parent sharing

If you know someone with a schedule that fits in with your childcare needs - and vice versa - you could consider looking after each other's children. Keep in mind, however, that you won't have the advantage of leaving your child with a trained professional.

Needless to say, it would be beneficial if you both have children of a similar age and live nearby to make this sort of arrangement work.

7. Look into an au pair

An au pair lives with you and will be learning the local language and culture in their spare time.

They are meant to be treated as part of the family rather than as someone who works for you. This means they can be paid 'pocket money' (the government says this is usually at least £90 a week) and you won't usually have to deal with making NI or pension contributions.

However, you won't be able to claim the childcare element of working tax credit to pay them and you will have to factor in the cost of their room and board on top of what you pay them.

8. Find some willing grandparents

If older relatives such as grandparents are retired, live nearby and are willing to help out, leaving a child in their care could save you a lot of money, and give them some valuable time to spend with their grandchildren.

If they're not already retired and look after a child under the age of 12, they may qualify for National Insurance credits. This is particularly handy as the time spent caring will count towards their state pension eligibility.

• Find out more: National Insurance and the state pension

9. Explore flexible working options

Some jobs really don't require you to work nine to five from the confines of an office. So have a chat with your boss to see if you can tweak your working hours and how often you come in.

You might be able to change your hours to fit around your partner and share childcare that way. 

Alternatively, you may be able to work from home for part of the week, though some employers will expect you to have childcare in place during any working hours.

Other options include going part-time, term-time only or doing a job share. 

Some employers have their own flexible working policy, so check your contract of employment or staff handbook, or speak to your line manager or human resources department.

• Find out more: visit Which? Legal for help with employment issues and understanding your rights

10. Look into breakfast and after school clubs

The time between your child starting and finishing school and you starting and finishing work doesn't always line up neatly. A breakfast club and/or an after school club can help you fill the gap in childcare and may be cheaper than a nanny or childminder.

The average price of an after school club for a week is £67.42 across Great Britain, or £2,629 a year during term time according to the latest Coram Family and Childcare survey. In contrast, the average price of a childminder to 6pm for a week is £72.36 across Great Britain, or £2,822 a year during term time.

Breakfast and after school clubs can give kids the opportunity to play and socialise, so can have more benefits than just saving money.

Organisations such as the YMCA, local church groups or your local council could be good places to check for cheap and free clubs that can help with out of school hours childcare. 

11. Try cheap and free holiday activities

If you have school-age children, the stretch of the six-week summer holiday can be a daunting prospect. Free summer holiday activities can help.

Check out Coram Family and Childcare, which lists organisations in your local area, where you can find information about childcare and family services. There are often youth groups and community centres which offer some form of help during the holidays.

Your local council may also run activities for children during the school holidays. It's worth checking its website to see what's on offer.

You could also try sending your children to a holiday camp. Some of the larger providers include Super Camps and Activate Camps, and costs typically start at around £30 a day.

• Find out more: cheap and free things to do over the holidays