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UK parents will spend £2bn on covering childcare costs and £9.1bn entertaining children over the summer holidays.
Hargreaves Lansdown surveyed 2000 parents and found that, on average, parents will fork out £250.70 on childcare. Meanwhile, a recent study from the Post Office found that entertaining the kids will cost parents a further £624 on average.
While over half of parents (57%) do not anticipate childcare costs, all parents will expect a bill to help keep their young ones entertained.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, had the following tips to reduce your summer childcare bill: “There are things you can do to cut the cost of the break – including shaving the tax off the cost of your childcare bill, taking advantage of flexible working options, or hunting down hidden bargains. But whatever solutions you find, it helps enormously if you’ve money put aside in advance specifically for childcare. That way you can make cheaper early bird bookings and can avoid the horrors of expensive borrowing that push the sky-high costs of the summer break even higher.”
As Sarah Coles mentions, one way to help manage the costs of summer is to have money saved up and ready. An easy access savings account is a great option, however savers should be careful to choose an account that allows unlimited withdrawals. The current top rate being offered in the easy access chart is 1.50% AER. Alternatively, parents who are able to start saving a year in advance may prefer to choose a regular savings account that requires regular monthly deposits to be made. The current top rate being offered in the regular savings account chart is 5.00% AER on a minimum monthly deposit of £25 and maximum of £300 – to find out why regular savings accounts offer high rates, read our guide Why do regular savings account seem to pay the highest rates?.
For parents who haven’t managed to save enough to cover the costs of the summer holidays, and who need to borrow money as a result, they could consider a 0% purchase credit card. A 0% purchase credit card allows purchases without having to pay interest for a set period of time, giving borrowers time to pay off the full amount without incurring extra interest costs.
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