Mums and Dads Look to Universal Credit for Help with Child Care Expense



Universal Credit is a financial safety net designed to help UK families pay living expenses. The scheme helps pay child care costs, but it’s up to mums and dads to understand the benefits and make the most of universal credit.

Buckling Under the Weight of Child Care Costs

Child care is a major expense for UK families. New parents struggle adjusting and even experienced mums and dads have difficulty finding money to pay for proper care. When quick cash is needed, UK payday loans are available online, providing short-term financing for urgent child care spending. But child care is an ongoing expense; you can’t afford to scrape together last-minute child care cash month after month.

Maternity and/or paternity leave can help offset child care needs during your baby’s first months, but what are your options when family leave time runs out? UK mums and dads utilise various arrangements to account for their children’s needs. In some families a single-income approach requiring one partner to step away from work is the most cost-effective way to accommodate a new baby. Other families choose

  • registered childminder,
  • day nursery,
  • live-in nanny.

Each of these childcare alternatives has advantages and downsides, including high costs, which is one of the primary childcare concerns facing cash-starved UK families. According to Money Advice Service the average family now pays more than £6,500 per year for child care – the figure doesn’t reflect the true cost of care for families based in London and other expensive areas. For mums and dads without a monthly cash cushion, caring for children represents a substantial expense, swallowing a sizable share of household income.

The average cost of sending a child under two to nursery stands at £242 per week in the UK. Part-timers, requiring only 25 hours per week of supervision presently pay closer to £127, on average. By comparison, an after-school club sounds like a bargain at £59 per week, but hours are limited.

Relying on a registered childminder may reduce costs slightly, averaging £113 for part-time care in many areas and £159 in and around London. If a higher level of service is desired, a part-time nanny can help for a few hundred pounds per week, part-time. And live-in accommodations are also available, commanding payments of £400-£700, plus room, board, insurance, and taxes.

How Does Universal Credit Help?

People on low income or out of work may qualify for childcare help from Universal Credit. The money helps offset living costs for individuals and families needing a financial lift. The scheme replaces legacy benefits, offering streamlined access that takes the place of benefits such as:

  • Child Tax Credit
  • Housing Benefit
  • Income Support
  • Income-based Jobseeker’s Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Working Tax Credit

The government is currently engaged in a pilot program transferring select groups of legacy beneficiaries to Universal Credit. Under the terms of the new scheme, a standard benefit is offered to those meeting minimum eligibility requirements; the eligible amount is then adjusted based upon the particular conditions facing each applicant. Payments are calculated according to

  • age,
  • family size,
  • rent needs,
  • health status.

In addition to added credits given for children in the family, Universal Credit also accommodates families needing help with child care expense. Under some circumstances, as much as 85 per cent of the cost may be paid. Current limitations allow for maximums around £600 per month for a single child and £1000 for two children.

Child care expense places pressure on UK families, perhaps amounting to several hundred pounds each month, or more. One source of help for families in crisis, Universal Credit provides money earmarked for childcare costs.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

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