Tax Free Childcare Account. How much can I pay in each month?

[woody87]

Hi all,

I'm going on maternity leave soon and currently paying out £780 per month for the days my DC are at nursery.

Rather than putting money into savings which I'll probably end up needing to spend I was planning to pay extra into my tax free childcare account with the hope being that the money would build up in the account and hopefully be able to pay for a couple of months childcare at the point when I'm on the lowest maternity leave payment before I go back to work.

Is this a reasonable thing to do? Does anyone know what the max amount is that I can pay into the tax free account each month?

Thanks

Yes you can do it. I did it to plan for while I was on mat leave.

You can get a max top up of £500 every 3 months so it's done on a 80% you and 20% top up. I think i worked out so if you put in £830 every month, you get the full £500 top up for each quarter. Anymore than £830 per month or £2490 per quarter they cap the top up.

You can't top up in one giant lump either it has to be every quarter so you don't reach the max top up limit set. Best pay it in monthly if you can, even if you put money in savings account abs set Dd to go to government account every month.

Nursery is so expensive so I hope this helps !

I hope this makes sense. I worked this

Thanks @candlesandpitchforks

So for example this month I have paid £700 into one account and £300 into other account.

For DC1 I paid £598 usually monthly and for DC2 I pay £182 as he is 3 so I get my 30 hours for him (in scotland so all 3 year olds are entitled to 30 hours)

I'm thinking if I just keep paying this amount in each month whilst I'm still earning full pay it will help at the other end at least!

I've been putting in the max for DS while on mat leave for DD. He's still going to nursery two days a week so we are using some but building up a little bit of a bank.

It's £500 top up every quarter and for every £8 you put in the government add £2. To get the £500 you need to put in £2000 over the quarter. I've been doing £660, £660 and then £680 over the three months.

I'm in England though, not sure if it's differently in Scotland.

That sounds sensible so for

DC1 pay as much as you can in but keep the monthly amount below the amount mentioned above

For D2 with 30 free hours - it only applies to term time so only covers 39 weeks of the year whether in Uk or Scotland I believe - my nursery lets us spread that 30 free hours over the year (50 weeks) so works out at 3 free days but with top ups so still £100 a month. I planned to have saved £1200 to cover 12 months off.

So in your case I would do 12 months x £182 = 2184. To work this in your favour I would pay it all in one quarter so pay in £750 per month (if finances allow) and get the max payout you can.

Annoying but worth it. The system currently certainly penalises people who don't know how the pay out works and its limitations.

I just want to make sure I'm maximising as much as I can with it.

I lived overseas when DC were born, after we moved home I didn't know about this tax free childcare and at one point I was paying out £1200 per month for them both before the free hours kicked in and I didn't know I was entitled to this help! Now that I'm aware I want to make sure I'm using it to the full advantage.

@woody87 in that case have a look at entitled to website. Depending on your income you may be offered help with paying for childcare via universal credit! Also child benefit for your first and second if your not already claiming it's not a lot but it's something!

They make it so difficult that actually rarely people get the max out unless you break it down. Nightmare. Hopefully this has helped a smig. Any questions just holla ! Xxx and good luck worth baby number 3 !!