During these difficult economic times, working families are finding the management of their finances even more of a challenge. Childcare costs can take up to half of a parent’s salary and fees have continued to rise, with an increase of 6% in the last year alone.1 Parents obviously want the best standard of childcare for their children, but with finances being squeezed, many are finding that the choice they make is based on affordability rather than quality.
In the context of these financial pressures, Busy Bees Benefits has launched a national campaign to help working parents save more on the cost of childcare. The “Mind the Gap – Raise the Cap” campaign aims to persuade the government to raise the weekly childcare voucher cap allowance from £55 to £75.
Childcare vouchers are an employee benefit used to pay for any registered childcare for children up to the age of 16. Any working parent can use childcare vouchers if their employer provides a scheme. At the centre of the campaign is an e-petition by Busy Bees Group Managing Director, John Woodward. This can be found at http://epetitions.direct.gov.uk/petitions/31669. The aim is to achieve 100,000 signatures, to make the issue eligible for debate in the House of Commons, leading to a policy change in the 2013 Budget.
The campaign has initially been rolled out via Busy Bees nurseries and has already created a buzz amongst staff and parents whose children attend one of the 146 sites across the UK. Clients of Busy Bees Benefits – employers with a Busy Bees childcare voucher scheme, carers who accept Busy Bees childcare vouchers and parents who use them to help meet their childcare costs - have also been told about the campaign and asked to sign the petition.
John Woodward said:
“The cap allowance was set by the government at £55 per week and this has not changed since 2006. As the UK’s largest provider of childcare, serving more than 15,000 children, we understand the pressures on working parents. We would like to help parents as much as possible, however we must be realistic. We want the campaign to receive the attention it deserves from the government and achieve its aim. Therefore, we think that £75 is an achievable target, which will make a real difference to working parents. With the cap at £75, basic rate taxpayers taking the maximum amount in childcare vouchers could save over £300 extra per year, with total savings amounting to over £1200 per parent, per year.”
The Daycare Trust’s survey revealed that average childcare costs are now over £100 for a part-time place (25 hours) in many areas of the country. The average yearly spend on childcare for a child under two is £5,103.
In addition to helping parents, childcare vouchers help businesses to attract and retain experienced staff, which is particularly important in the current tough economic climate.
By providing a childcare voucher scheme, businesses also benefit by saving on employer National Insurance contributions. Under current rates, if a working parent sacrifices the maximum amount of £243 per month in return for childcare vouchers, a business can save over £400 per year for a basic rate taxpayer2 taking childcare vouchers. If the cap were to rise to £75 per week, savings per scheme user, per year, paying basic rate tax would rise to almost £550.For more information about the campaign visit www.busybeesbenefits.com.
· 1 Daycare Trust’s Annual Childcare costs survey 2012
· 2 before service charge for operating the scheme. Service charges applied by Bees Bees Benefits are always less than employer National Insurance contributions.