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Childcare vouchers vs new scheme

(9 Posts)
Kerrieb86 Tue 31-Jan-17 12:03:42

I have a 11 week old baby, planning to return to work when he is 6 months old. Currently trying to work out best way to pay for the extortionate nursery fees.

I am familiar with childcare vouchers where we can buy up to £225 (or similar) from our salary, tax free. The remainder of fees would need to be topped up from rest of our salary which would be tax deductable.

This year, the government are launching the new tax Free Childcare Scheme.

For every £8 we pay in, the government will add an extra £2 towards childcare costs, up to £2,000 per child.

Maybe I'm being daft, but the original voucher scheme seems to still offer the biggest saving- as we are not paying tax on over £2k/year.

Could a fresh pair of eyes glance over this for me and let me know what you think?

Thanks in advance! X

2014newme Tue 31-Jan-17 12:07:46

Childcare vouchers we use for holiday clubs etc now are children are at school so check you can do that. You have raised a good point I was up to speed on this but then the new scheme was delayed I do need to refresh my mind on the options

Note3 Tue 31-Jan-17 12:11:07

I looked into it and decided it's better value for us to stay in voucher scheme. I can't remember why but I remember it definitely was better for our situation. For someone else it's better the other way round and also some employers don't offer voucher scheme so at least those ppl get help too with new scheme

Kerrieb86 Tue 31-Jan-17 12:15:37

Thanks both, good points made!
My employer does offer vouchers and the holiday clubs point is one to consider too.
I am thinking that it may still be best option to sign up for (until it is fully replaced with new scheme) as both my husband and I would get some tax free allowance. The way I'm reading the new scheme is that it is capped at £2k per child, not per paying in adult.
If anyone else has any more info or views on this, I'd welcome thoughts.

2014newme Tue 31-Jan-17 12:20:21

What age does the new scheme go up to?I think it may be 12 whereas vouchers go on longer

Gladiatorsready Tue 31-Jan-17 15:30:42

Hi, I'm not due to go back to work until September but have already signed up to the current childcare voucher scheme. There is an article on the Money Saving Expert website which allows you to work out which is better for specific circumstances. It seems to depend on income/tax bracket, may be worth having a look at that.

Acorncat Tue 31-Jan-17 22:34:35

I think you save £78 a month in tax for each basic rate tax payer. So for me I should be better off on the new scheme as 20% of childcare is more than that a month. I'm worried I'm working it out wrong now though!

AbbeyRoadCrossing Tue 31-Jan-17 22:38:13

It'll depend on your circumstances. I'm currently working it out myself as I have 2 DCs in nursery so might be better off in the new one as it's per child.
I think the new scheme can be useful if self employed iirc

superoz Fri 03-Feb-17 00:55:27

This is useful:

http://www.moneysavingexpert.com/family/childcare-vouchers

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