Choosing the right childcare can be a daunting task. Our guide takes you through the different options - think about which ones suit your family’s needs and budget best.
- Registered childminder
- Day nursery
- Nanny
- Au pair
- Playgroup or pre-school
- Sure Start Children’s Centre
- Nursery school
- Family or friends
- Help with childcare costs
- Choosing the right childcare option
Registered childminder
Childcare costs
The cost of childcare will depend on the option you choose and your location. For a rough idea of childcare costs, see our average childcare costs comparison.
What is it?
Someone who looks after children in their own home and is registered with one of the following:
- Ofsted (England)
- Care Inspectorate (Scotland)
- Care and Social Services Inspectorate (Wales)
- Health and Social Services Trust (Northern Ireland)
Pros and cons
- They’re self-employed, so you don’t have to worry about paying their tax or National Insurance (NI) contributions.
- As long as they’re registered, you can use childcare vouchers or claim the childcare element of Working Tax Credit.
- Many childminders work flexible hours and pick up/drop off children at school or playgroup.
- You can use your free weekly childcare allowance if your child is three or four.
- You’ll need to make other arrangements if they’re ill or on holiday.
Day nursery
What is it?
Care and education for children aged 6 weeks to 5 years.
They might be run privately or by community organisations, local authorities or employers.
Pros and cons
- They’re typically open weekdays from 8am to 6pm, which fits most working hours.
- Nursery fees are sometimes subsidised by local authorities or employers.
- You can use childcare vouchers or claim the childcare element of Working Tax Credit to help with the cost.
- You can use your free weekly childcare allowance if your child is three or four.
- They’re usually more expensive than childminders (see our average childcare costs comparison.
- You usually have to pay the fees when you’re on holiday.
Nanny
What is it?
Someone who looks after a child in its own home. It’s usually a live-in or daily role, but part-time nannies are also available.
Nannies can voluntarily register with Ofsted.
Pros and cons
- Your child is cared for at home.
- As long as they’re registered, you can use childcare vouchers or claim the childcare element of Working Tax Credit.
- You’ll be their employer, and responsible for paying their Income Tax and NI contributions.
- As an employer, automatic enrolment means you’ll have to pay into a pension for your nanny if they earn more than £192 a week (£833 a month) before tax.
- You’ll need to make other arrangements if they’re ill or on holiday.
Au pair
What is it?
Someone who lives with you and learns the local language and culture while providing around 30 hours’ childcare and help around the home.
Pros and cons
- They’re paid ‘pocket money’ so the costs are much lower than other childcare options (see our average childcare costs comparison
- They’re usually treated like a member of the family rather than an employee so you won’t have to deal with their tax or NI.
- You can’t use childcare vouchers or claim the childcare element of Working Tax Credit.
- You’ll need to factor in the cost of their room and board on top of what you pay them.
Playgroup or pre-school
What is it?
Community and voluntary-run care and education sessions for three to five year-olds.
They typically offer three-hour morning or afternoon sessions during term time.
Pros and cons
- A low-cost option (see our average childcare costs comparison
- As long as they’re registered, you can use childcare vouchers or claim the childcare element of Working Tax Credit.
- You can use your free weekly childcare allowance if your child is three or four.
- You’ll need to find alternative childcare to cover the school holidays and/or the rest of the day.
Sure Start Children’s Centre
What is it?
Local authority-run children’s centres providing advice and support for parents and carers.
Some also provide them childcare for two to four year-olds.
Pros and cons
- A low-cost option - many of the services are free (see our average childcare costs comparison.
- Because they’re a ‘one-stop shop’, you can get advice on other things such as training and job opportunities.
- You can use your free weekly childcare allowance if your child is three or four.
- Not all centres allow you to leave your child there all day.
Nursery school
What is it?
An introduction to primary education for three to five year-olds - often attached to a pre-school or primary school. Open during school hours in term time.
Pros and cons
- They’re usually free if attached to a primary school.
- Your child will be taught by qualified teachers.
- You can use your free weekly childcare allowance if your child is three or four.
- You’ll need to find alternative childcare to cover the school holidays.
Family or friends
Did you know?
More than one in four families use grandparents’ care during term time.
Source: Department for Education, 2014
What is it?
Having a family member or friend look after your child, either for free, payment or an arrangement where you look after each other’s children (known as ‘reciprocal childcare’).
This might seem like a convenient and affordable option, but the rules around these kind of arrangements can be complex.
Pros and cons
- A family member doesn’t have to be registered with Ofsted if they’re providing childcare free of charge.
- Legally, you can’t use a friend to regularly look after a child under eight for more than two hours a day during normal working hours - unless they’re a registered childminder. This is something to think about if you have a reciprocal childcare arrangement.
- If you pay a family member or friend for childcare, you can’t use childcare vouchers or claim the childcare element of Working Tax Credit unless they’re a registered childminder and look after at least one other unrelated child.
Specified Adult Childcare credits
This scheme is aimed at family members (usually grandparents) who stop work to help look after a child.
They might benefit from it if they have not built up enough National Insurance (NI) contributions to qualify for the full state pension.
The carer might be eligible if they are:
- Over 16, but below state pension age.
- Related to the child. Grandparents are most common carers, but any family member can claim.
To be eligible the child needs to be under 12 years old and the:
- Parent (or main carer) is entitled to Child Benefit
- Parent has a qualifying year of NI contributions they are willing to transfer to the carer.
- Parent (or main carer) agrees to the application. You might not agree if, for example, you’re not returning to work and need the NI contributions.
Applications for a particular tax year cannot be made until the following October as this allows NI records to be up-to-date for the previous tax year. For example, for the 2016/17 tax year, applications can be made in October 2017.
Help with childcare costs
Remember, it’s never too early to start planning for the cost of childcare.
You don’t need to be on a low income to get help with childcare costs. You might be able to get help from:
- Your employer – in the form of childcare vouchers or direct payment for childcare
- The government – as the childcare element of Working Tax Credit or Universal Credit or the Tax-Free Childcare scheme (from 2017)
Free early education or childcare
All three and four-year-olds in the UK are entitled to some free early education or childcare.
How much you can get depends on which country you live in.
England
All three and four-year-olds can get 570 hours of free early education or childcare every year.
Most people take this as 15 hours each week for 38 weeks.
You can use these free hours at Ofsted registered childcare providers, such as:
- Registered childminders
- Playgroups and pre-schools
- Sure Start Children’s Centres
- Nurseries and nursery classes
From September 2016, a pilot in some areas will extend this to 30 free hours a week.
Scotland
Three and four-year-olds can get 600 hours of free early learning and childcare every year. This works out at around 16 hours every week for 38 weeks.
Some families with two-year-olds might also qualify if they receive certain benefits.
Wales
Three and four-year-olds can get 10 hours of free early education a week for 38 weeks.
If you live in a Flying Start area you might be able to get free part-time childcare when your child is aged 2 or 3 years old.
This will give you 12.5 hours per week for 39 weeks.
Northern Ireland
Children are entitled to at least 12.5 hours of free pre-school education a week for 38 weeks in the year before they start Primary One.
Choosing the right childcare option
Demand for childcare places is high, and sometimes the only way to secure a place is to register your child before they’re even born.
Costs vary a lot depending on where you live, so it’s a good idea to find out what you can expect to pay in your area.
See our average childcare costs comparison for UK and London averages.
You can work out whether the childcare you want is affordable by comparing the costs with your disposable income after essential outgoings.
Use our Budget Planner to find out how childcare costs affect full-time, part-time or flexible working.
This article is provided by the Money Advice Service.
