A last call for Childcare Vouchers
A news report on the BBC Website last week highlighted the high cost of childcare for the UK’s working parents. The BBC’s reality check report makes it clear that the cost of childcare in England is amongst the highest in the world for some families. It follows that this is a genuine barrier to remaining in the workplace for so many working parents.
This is not just an employee issue however. The UK is in the midst of a genuine recruitment crisis, with employment rates at their highest level since the 1970’s. As a result, employers are often struggling to find and recruit suitable and qualified talent. Working parents are being priced-out of paid childcare provision and being forced to reduce their hours or leave the workplace altogether. This is potentially as big a problem for the employer as it is for their workers.
These concerns have led the Government to recently launch a new initiative, Tax Free Childcare (TFC), to provide some state financial support for working parents with childcare costs. TFC is set to replace the existing Childcare Vouchers (CCV) system from April 2018 onwards, although existing members of CCV schemes will be able to retain their rights into the future if they wish to do so. The reason for this flexibility is that the two systems differ quite significantly in several respects, and in particular with regard to the level of financial support on offer (which varies with individual family circumstances).
The reality is that many employed working parents will actually be better served by the existing Childcare Vouchers offering than the new Tax Free Childcare initiative. So it’s in everyone’s interests if employers alert all their parent employees to these two options, so their workers can make an informed decision about which option provides the best financial outcomes for their particular circumstances. The window to do this is fast closing though, with a salary deduction to Childcare Vouchers needing to be made before the 5th April to retain that option going forward. We covered several of the more common questions being asked by employers in this respect in an article on this subject last year.
For more information on the various components of Government support for working parents please visit the Childcare Choices website, or speak to your usual Jelf consultant.
Steve Herbert is Head of Benefits Strategy at Jelf Employee Benefits