MSE News: New Childcare cost help – winner and losers

edited 19 March 2013 at 8:33PM in Child Support
13 replies 3.5K views
Former_MSE_HelenFormer_MSE_Helen
2.4K Posts
edited 19 March 2013 at 8:33PM in Child Support
"MoneySavingExpert.com analyses the Government's new childcare scheme, which was announced today..."
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New Childcare cost help – winner and losers

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  • mysk_girlmysk_girl Forumite
    793 Posts
    Tenth Anniversary Combo Breaker
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    Your guide doesn't include any mention of the fact that the old scheme is salary sacrifice therefore impacts on the Child Benefit withdrawal. Those who fall within the £50-60k bracket have to also account for the increase in salary by coming out of the voucher scheme will mean more of the child benefit to be forfeited.

    That said (because this issue does affect my husband and I), I think it is good that self employed are covered and that it doesn't depend on your employer being willing to provide it.
  • Catriona_PCatriona_P Forumite
    840 Posts
    Ninth Anniversary Combo Breaker
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    Both myself and my husband currently work and receive vouchers - so the new scheme will mean us losing £660 a year (according to the chart). That's a substantial amount of money for us.

    A big thumbs down here. :mad:
    "Why, this is hell, nor am I out of it."
  • If I have understood it right we will lose out.
    I am self employed and husband is full time employed. As I work from home I was intending to use the voucher scheme and not have any extra childcare as we don't want the little one in full time care but I need time to do work without him around. Now it looks like we will have to pay for 80% of our childcare which makes it not financially worth me putting him in the nursery care.
    :-(
  • eilidhsmumeilidhsmum Forumite
    18 Posts
    10 Posts
    We fall into the category of people who have one parent earning between 50-60K and one earning much less on a part time wage. We are already starting to lose our child benefit.

    If we are forced out of the current system, the over all cost of our child care will more than double when you take into account we're losing the higher tax allowance on the child care vouchers, we'll lose the salary sacrifice which will then decrease our child benefit further. The tax rate that we would be on for the portion of our income between 50-60K would be astronomical!!! :(
  • I'm already confused and this change is supposed to make things easier!

    My wife and and currently use the vouchers for our 2 boys childcare. I'm higher rate and paying £124 and my wife pays £243.

    I think we're going to be worse of looking at that table but really hard to tell!
  • msallenmsallen Forumite
    1.4K Posts
    Ninth Anniversary 1,000 Posts Name Dropper
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    As usual, the losers are those of us who didn't have the children we couldn't afford but pay towards everyone else's.
  • becominganobsessivesaverbecominganobsessivesaver Forumite
    827 Posts
    Part of the Furniture 500 Posts Combo Breaker
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    I think the one thing missing is the total cost of childcare, as to achieve the max savings inder the new scheme you need to be spending the full amount of £6k, under the old scheme it was just under £3k per parent, quite important if you are only using care a couple of days per week.
  • Simplest solution to it all is scrap all child benefit and all tax credits. You want children then ensure you can afford them !!
    You have to target the wasters who refuse to work as well and have had kids just to get a house etc.
    No matter how many schemes they come up with it will never be fair for everyone.....so fairest way is not to have them !!
  • It seems to me as though anyone who has less than 2 or 3 children all of school age or anyone only uses childcare for a day or two a week and is currently enrolled in childcare vouchers will lose out as after school childcare means that the total spend is far less than full time childcare. This is because the new scheme runs on a percentage basis whereas the existing childcare vouchers work on a fixed amount basis. I for one am hoping that both mine and my wife's employers keep running the childcare vouchers scheme because under this scheme we are better off by hundreds of pounds every year versus the new scheme.

    Oh and I certainly agree with the other posters that many of those who earn in the £50-£60k mark are better off with childcare vouchers as this increases their entitlement to child benefit.
  • can6342can6342 Forumite
    19 Posts
    Thank you MSE for the useful guide.. I thought it sounded like we'd be worse off under the new scheme and your article confirms it. We're both employed (basic rate taxpayers), and have both just started paying the maximum amount into childcare vouchers. We have one child.
    Hopefully we can stick with the current scheme for a while longer.
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