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Parents urged to consider childcare vouchers

Parents urged to consider childcare vouchers

Category: Money

Updated: 01/02/2011
First Published: 14/12/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Parents who have not signed up for childcare vouchers have been told they could be missing out on thousands of pounds of savings.

Computershare Voucher Services (CVS), one of the firms that administer employers' childcare voucher schemes, has launched a campaign to raise awareness of the savings that can be made for childcare up to the age of 16.

Childcare vouchers are an employee benefit available to all eligible working parents.

Once an employer is registered for childcare vouchers, parents are entitled to exchange a part of their salary for vouchers, with this part of their salary being exempt from tax and National Insurance contributions. The vouchers are also National Insurance exempt for employers.

Following the spending review, from April 2011, the tax relief for high earners available through childcare vouchers will fall in line with the amount available to basic-rate tax payers.

However, this still means that tax relief of up to £900 remains available to all tax payers on an annual basis and parents can still benefit from additional savings ahead of April.

"Childcare and encouraging people to return to work are high on the Government agenda at the moment and childcare vouchers remain the most viable way to save money on registered childcare, particularly following the removal of child benefit for many parents," said Simon Moore, managing director of CVS.

"The proposed change promotes equality of benefits, but it will mean that those on higher incomes will see their overall savings reduced unless they sign up to a scheme before April 2011.

"Those already in a scheme when any changes take effect will not see a difference in the way their savings are calculated, so during the next few months I expect to see an influx of parents and proactive employers signing up to schemes."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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