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Childcare Vouchers deadline extended by six months!

Posted on 23 March 2018

Earlier this month the government announced that Childcare Vouchers will remain open to new entrants alongside Tax-Free Childcare for a further 6 months beyond the original April 2018 cut-off.

This is all thanks to parents like you who signed the petition or wrote to your MP to express your concerns.

So far the government have stated that the new deadline for parents to join a Childcare Vouchers scheme will be October 2018. An exact date or any further details have yet to be confirmed. However, as before, parents already on the scheme before the cut-off will be able to continue benefitting from Childcare Vouchers beyond this date.

Why does this matter?

Childcare Vouchers schemes were due to close to new joiners on 6th April 2018 to make way for Tax-Free Childcare (TFC). However, since its launch in April 2017, TFC has been plagued with teething problems.

Additionally, research found that as many as 57% of parents would be worse off with TFC than with the existing Childcare Vouchers scheme.

What is right for you will depend on both your current and future circumstances (e.g. an increase in earnings or stopping work could mean you are not eligible for some childcare support). But generally speaking here are the groups of families who will be better off with Childcare Vouchers:

  • Couples where one parent doesn’t work (or earns less than £120/week on average)
  • Basic-rate taxpayers with childcare costs of £9,336/year or less
  • Higher-rate taxpayers with childcare costs of £6,252/year or less
  • Parents who earn £100k+/year
  • Parents with childcare costs for children aged between 12 and 15
  • Parents who claim Child Tax Credits or Universal Credit with Childcare Vouchers, where combined savings exceed those offered by Tax-Free Childcare

Information and figures provided are for general guidance only. Please note we are unable to provide advice on individual circumstances.

Do you need to take action?

While the extension will certainly give thousands more parents the opportunity to benefit from Childcare Vouchers, this doesn’t mean you should put off considering your childcare savings options.

By joining a Childcare Vouchers scheme now you can keep your options open. For example, you could join by contributing from as little as £1/month.* You can also use Childcare Vouchers alongside 30 hours free childcare for 3 and 4-year-olds.

Even if you join Tax-Free Childcare later on, you can still use any Childcare Vouchers you have accrued as they do not expire. If you successfully sign up to TFC you will not be able to re-join Childcare Vouchers.

To join (or rejoin) the Childcare Vouchers scheme, speak to your employer or HR department today.

 

*Minimum contribution may vary – please check with your employer.