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The future of childcare support for working parents

Published: 20 Feb 2017

Keep childcare voucher scheme open to support parents say childcare advocates

For immediate release

 Working Families and the Childcare Voucher Providers Association (CVPA) have today called on the government to keep childcare vouchers open to parents alongside the new Tax Free Childcare scheme.

The call comes as both organisations publish a new report, “The future of childcare support for working parents”.

The report calls for the government to keep childcare vouchers open to new users, instead of closing the scheme to new entrants in April 2018.

The report finds:

  • Childcare vouchers are a widely-used benefit that is popular with parents and employers alike.
  • Many lower earners will lose out on money under Tax-Free Childcare, compared to childcare vouchers.
  • Vouchers give a central role to employers, who value the scheme and being able to support the parents who work for them. Parents find vouchers easy to access due to the involvement of their employer, and vouchers provide a way for employers to demonstrate their commitment to supporting family-friendly working practices.

Launching today’s report, Working Families’ Chief Executive Sarah Jackson OBE said:

“Families juggle working and caring in lots of different ways, and we need a childcare support system that offers maximum choice for working parents.

 “On paper, the new Tax-Free Childcare scheme offers up to £2,000 of support a year but the truth is many families are not going to be spending the amount needed to benefit from that level of support.

 “Employees consistently place a premium on employers who understand and support their childcare needs; vouchers are an important mechanism for this discussion to take place. There’s no reason why the creation of the new Tax-Free Childcare scheme has to bring vouchers to an end.”

Jacquie Mills, Chair of the CVPA, said:

“The CVPA welcomes any additional childcare support for families.

 However the reality is that many families will lose out under Tax-Free Childcare as compared to vouchers.

 The headline figure of £2,000 looks generous, but many parents will get far less in reality.

 Families need to check how they’ll fare under Tax-Free Childcare to make an informed decision about whether they would be better off with childcare vouchers.

Childcare vouchers are an extremely popular benefit that have helped millions of parents since their introduction over ten years ago.

 We’re calling for childcare vouchers to be kept open alongside the government’s new scheme. Let families see which scheme they would be better off with, and let them make a choice.”

-ENDS-

 Notes for editors:

  • Tax-Free Childcare is a new government scheme that will provide a 20% top-up on childcare spend to families who qualify. Families can receive up to £2,000 per year, per child.
  • Government figures show that, on average, families will only benefit by £600 a year under Tax-Free Childcare.
  • According to the Department for Education’s most recent figures, the average family spends £2,014 a year on childcare.
  • A two-parent family where both parents are paying the basic rate of tax can save up to £1,866 a year with vouchers.
  • Only half of eligible families are expected to take up Tax-Free Childcare.
  • Childcare vouchers operate as a salary sacrifice benefit. The amount that parents can save under childcare vouchers is linked to their tax band, with basic rate taxpayers able to save the most.
  • There are over 780,000 parents currently using childcare vouchers. Vouchers have benefited millions of parents since their introduction in 2005.

Working Families is the UK’s leading work-life balance organisation. The charity helps working parents and carers and their employers find a better balance between responsibilities at home and work. The charity also works with employers to support them in creating workplaces which encourage work-life balance for everyone.

The CVPA is the industry association established to represent the views of childcare voucher provider companies. CVPA members establish self-regulation of the childcare voucher industry, providing a benchmark in terms of quality of service employers can expect. The Group also formulates best practice, protecting all stakeholders’ interests.

Read the full report here:  www.workingfamilies.org.uk/publications/the-future-of-childcare-support-for-working-parents

Contact:

Working Families on 07715 651 509 or press@workingfamilies.org.uk

CVPA: Dean Duke on 020 7227 1643 or deanduke@wacomms.co.uk