At this point the existing Childcare Voucher scheme will be closed to new joiners. This means that there is an extra opportunity for parents to make the existing savings of up to £77 a month, and make sure they have the choice of scheme when TFC is introduced. Anyone who is getting childcare vouchers at this point can continue to do so until their eligibility ceases on one of the four following grounds:
- They change employer
- Their child reached its 15th birthday (16 if disabled)
- They do not receive childcare vouchers within a 12 month period
- They complete the exit form and open up a TFC account with National Savings & Investments
Some parents may benefit from the new scheme, some will lose out and some will not be eligible. Tax Free Childcare generates savings of 20% of up to £10,000 per child. Childcare Vouchers generate savings of 32% of up to £2,916 per parent. On the whole those with higher childcare costs (over £4,663 a year for a single parent or £9,326 for a couple) are likely to benefit more from TFC, however there are eligibility criteria.
By getting childcare vouchers now or continuing to do so, parents can protect their entitlement and make sure they have the choice of scheme come 2017.
For companies this gives the ideal opportunity to put a scheme in place so your parents can start saving. And as a business you stand to save up to £402 in National Insurance contributions per year for every parent who joins the scheme.
If you have a scheme in place there is now an extended window of opportunity to continue driving new members to the scheme over the next 2 years.
For more information on the two schemes click here.