New scheme to help parents save childcare costs

The expanded childcare support scheme is expected to benefit thousands of couples from having to choose between family and career

Picture for representation (iStock)

Shajil Kumar

Rishi Sunak government’s expansion of the free childcare scheme aims to close the gap in support between the end of maternity leave and a child’s third birthday.

This is expected to benefit thousands of couples from having to choose between family and career.

The prime minister said the new scheme will help build a brighter future for families and spur economic growth.

Currently, eligible working parents of 3 and 4-year-olds can access childcare support for 30 hours a week.

Under the first phase of the new scheme, working parents of two-year-olds will be able to access 15 hours a week of government-funded childcare from April 1.

This week over 150,000 children will be provided secure government-funded places.

From September this year, this support will be extended to working parents with a 9-month-old child.

From September 2025, the support for these children will be increased to 30 hours till they go to school.

Once the full rollout is completed, parents can save around £6,900 a year.

To implement the scheme, the Government has increased staff strength and opened new centres.

It will be providing over £400 million of additional investment to uplift funding rates in 2024-25.

In the recent spring budget, chancellor Jeremy Hunt confirmed that the government will increase rates over the next two years by an estimated £500 million.

Education Secretary Gillian Keegan said this will be a lifeline for working parents. “Support with childcare costs has an enormous ripple effect, freeing up parents to increase their hours at work and put more money in their pockets, or giving them the security to try out a new career or passion.”

Various business organisations have also welcomed this scheme.

Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said, “When parents struggle to find a childcare solution, employers lose talented people from the workplace. That’s damaging for people, business, and the economy. The further rollout of free childcare in England is good news. It will benefit parents and employers.

Helen Dickinson, Chief Executive, British Retail Consortium, said “The cost of childcare remains one of the biggest challenges to many parents, preventing many who wish to re-enter the workforce. As the largest private sector employer, we welcome the expansion of childcare provision.”

However, the Labour party claims families are still struggling to access places ahead of the Government’s expansion of funded childcare.

It claims the Conservative party does not have a proper plan to expand the childcare support scheme.