Buying Child Care Vouchers

Childcare vouchers were a way for employed parents to pay for childcare out of their incomes before they were taxed, making them huge savings. The scheme closed to new applicants on 4 October 2018 and has been replaced by Tax-Free Childcare. Only those who joined a scheme before this date can continue to use vouchers if they stay with the same employer.

Getting Vouchers

Childcare vouchers are now closed to new applicants as of 4 October 2018. They have been replaced by the Tax-Free Childcare scheme. If you need help with childcare costs, you should look into Tax-Free Childcare instead, which provides government top-ups to eligible working families.

Studies have shown that companies that have such family-friendly policies reduce absenteeism and encourage morale among their employers. Buying childcare vouchers is also good financially for the company itself: they can save up to £370 per employee annually in NI contributions.

The vouchers can be used for any childcare up to age 15, with one proviso: the provider must be regularly inspected by Ofsted. That means you can use them for a variety of Ofsted-regulated childcare providers, including:

• nurseries
• au pairs
• nannies
• childminders
• playgroups
• breakfast clubs
• after-school clubs
• holiday playschemes

Please note that if you have family members employed to look after your children, you cannot buy childcare vouchers unless they are officially Ofsted-registered childminders. It may be worth looking into whether this is a cost-saving practice for you or not.

Working Parent Support Checker

See what financial support a working parent could be entitled to, from free childcare hours and tax-free childcare to Child Benefit and Universal Credit help.

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How Vouchers Work

If your workplace has such a voucher scheme, you are entitled to purchase up to £243 of childcare with it every month – per working parent. You may have to pay for it with your salary, called a “salary sacrifice”, but you will still make a profit, so it's worth it. You will get the same amount in vouchers no matter how many children you have, so if you have a large family you will save as much money as someone with only one child.

For those still eligible to use existing voucher schemes (joined before October 2018), many childcare providers still accept vouchers. However, new parents should instead look into Tax-Free Childcare, which provides government support for eligible working families. You can apply for Tax-Free Childcare through the government website and start receiving the 20% government contribution towards childcare costs.

For those still using existing childcare voucher schemes (joined before October 2018), vouchers can provide significant savings. However, for new applicants, Tax-Free Childcare has replaced the voucher system. Tax-Free Childcare provides up to £2,000 per child per year (£4,000 for disabled children) and is available to eligible working families. Check the government's childcare calculator to see what support you may be entitled to.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Working Parent Support Checker lets you see what financial support a working parent could be entitled to, from free childcare hours and tax-free childcare to Child Benefit and Universal Credit help. Try it now →