Are you better off signing up to the current childcare voucher scheme? Probably!


As has been widely reported in the press recently, the UK Government is replacing the current childcare vouchers scheme with a new more complicated scheme that we feel will disadvantage the majority of the user of the current childcare voucher scheme.

Current Scheme Which scheme comes out on top? New Proposed scheme
£1,866 annual Tax savings per couple £ Potential savings Even if you have more than one child, are you


£2000 per child but have to be paying £10000 per child!

Savings are 20% added to your own deposit

No cost to parents to use the scheme £ Savings for parents

Costs of the scheme to be met by the taxpayer, around £120 million over 5 years!!!!
Up to 100% of child care costs covered. £ Savings for parents

Maximum of 20% of child care costs covered
Simple scheme managed through your employer. You do not have to make any efforts to stay on the scheme, and you do not have to pay to use the scheme. Simplicity and savings

More complicated scheme where you have to create an account with NS&I and hope they can sort the system out
Tax savings of up to 32%. Because the current scheme allows you to make payments before TAX and NI deductions are taken from your wages. Extra 12% tax saving

Tax savings of 20%. 20% is reimbursed to you, but you pay from your wages after tax, like a tax reimbursement.
Applies to children up to age 15. School holiday clubs, and after school costs can be covered. All school age children are covered. This can often be the bulk of childcare costs for parents of school age children Scheme applies larger range of children because of the age criteria

Being rolled out in geographical areas and age groups
Only one parent needs to be in work. This allows flexible working patterns and more chance of being able to benefit from the scheme. Single parents can be working part time and still use the current scheme More parents and couples eligible to claim

Both parents must be in work. This reduces the potential for parents to be able to use the new scheme. Single parents must work a minimum of 16 hours to be eligible.
You can claim even if one parent is in receipt of state benefits. This again allows for parents on a wider range of incomes and wages to be able to utilise the scheme More parents and couples eligible to claim

If either parent is in receipts of any Universal Credit payment, you cannot claim. This reduces the number of parents able to access the scheme. Plus earning levels will be capped unlike the current schewme
Employers make NI savings. This means you are saving your employer money by being in the scheme as they do not have to make the NI contributions on your deductions which can allow them to use the money elsewhere, for example with subsidised Gym Memberships for staff. Employers are better off, as well as their staff

Employers make no saving



Currently a couple with one child can make savings of £1866, under the new scheme, the maximum saving per child will be £2000. But more importantly, the new proposed scheme will only allow you to receive 20% of your child care costs up to a maximum of £2000 per child, where as the current scheme allows you to pay up to 100% of your child care costs. Click here to get up to 100% of your child care costs back now.

The current scheme applies to all children up to the age of 15 (16 if disabled)

Employers make savings under the current scheme of 13.8% over the employers NI threshold, up to £402 per employee per year. Companies have been using these savings to offer other benefits to their employees or to fund departmental costs as the savings can be significant across a work force. If you are an employer looking to take advantage of the current scheme, click here while the scheme is still open to you.

Finally, the current scheme is easy to set up through your employer, but the replacement scheme will be more complicated and will require you to send payment to NS&I, for them to then to obtain a top up payment from the government which they can then add to your payment and send to your child care provider.

We suspect that child care providers prefer the quick and efficient method of payments that we offer utilising the current scheme, and parents can keep track of their payments and allowances quickly and easily with our on-line account manager. Click here to keep your payments up to date with your current child care professional