Tax Free Childcare - Maths help!!

[BlueWhale47]

Quick query as I am terrible at maths - equally terrible at explaining things.

30 free hours have kicked in and nursery fees will drop to approx £711 pcm. I am aware that the maximum government top up is £500 every 3 months but obviously this is based on how much you put in.

I am wanting to ensure I put enough funds into the account to get the full £500 entitlement but cannot for the life of me work out what this figure is.

I would appreciate help from anyone with a better understanding than me!

The Gov pay in 20%. £500 is 20% of £2500. So you need to pay in £2500 over those three months. I think?!

I pay in 80% of the nursery bill, which means that with the 20% top-up, it's covered.

In your case: £711 x 0.8 = £568.80

So pay in that amount each month, the government top up will be £142.20, and that'll cover your bill.

Is there any reason you want to get the maximum top up amount when you don't actually need to spend that much? Are you wanting to build up funds in your TFC account?

You don't need the full allowance so just pay in £711× 0.8= £568.80 each month.

No. The government pays 20% of the total, not 20% of what you pay in. It actually works out as 25% what you pay in.
nursery bill £1000
you pay £800
gvt pays £200 (20% of £1000, 25% of £800)

So for a government contribution of £500 you would need to pay 4x that which is £2000. But then you'd end up with £2500 in your TFC account when your bill is only £2133.

Is there a reason you want to build up funds in your TFC account? We do pay in more than we need to to cover holiday clubs now DDs are at school but if you don't spend the money in the account on childcare you lose any of the government top up when you withdraw. E.g. you can only withdraw what you've paid in.

Unless you're hoping to build a pot now so you can stop or reduce payments going in in the future?

Hi all,

Yes I was hoping to overpay as has helped in the past to have a surplus in there if for some reason or another finances are tighter one month to allow us to pay in less that month etc. I am looking to move house in the next few months so just want to have a buffer as I know outgoings for that period of time are due to increase.

Thanks!

£2000. What I haven't worked out is what they consider every 3 months - if it's rolling from deposit date, or quarterly according to the calendar, or something else. It does tell you on the account what you have left of the potential government top up for the period though.