Understanding the new childcare allowances

Published on: September 20, 2023

It was music to many parents’ ears when it was announced in the Spring Budget that there will be more support for many working parents with the extension of free childcare support

The new offer comes into play in the UK in April 2024 in a staged approach and will more than double the current support. The aim is to make a positive impact for parents, particularly mums, who will be able to stay in work and keep the economy growing.

Childcare is one of the largest costs that working households face. In some cases it prevents parents from going back to work. The new scheme will hopefully enable many parents to have the best of both worlds, going back to work with less of the struggle to pay childcare costs.

Below we explain everything you need to know about the new UK childcare allowances announced in the Spring Budget. Unfortunately, these rules won’t apply to Scotland, where parents will still receive support similar to that currently offered in England and Wales – you can find out more at www.mygov.scot/childcarecosts-help

Who will be eligible for 30 hours free childcare?

Currently, parents who work more than 16 hours a week and who earn less than £100,000 are entitled to 30 hours free childcare a week for children aged three to four. Support will be expanded so working parents of all children over the age of nine months will be entitled to 30 hours of free childcare.

When will it start?

From April 2024, working parents of two-year olds will be able to access 15 hours of free childcare. From September 2024, 15 hours of free childcare will be extended to include all children from the age of nine months. From September 2025, working parents of children under the age of five will be entitled to 30 hours free childcare per week.

Childcare support for people on Universal Credit

Parents on Universal Credit are also set to get further support. Currently, up to 85% of childcare costs can be claimed back. However, by summer 2023 parents will be able to access this funding upfront instead of in arrears. The maximum amount of support will also be increased by almost 50%, to £951 for those with one child and to £1,630 for those with two.

Want to know more?