Working parents in England can start applying for 15 hours of funded childcare for their two-year-olds from 2 January.
This new employee benefit, initially outlined in the 2023 Spring Budget, aims to alleviate the substantial costs of childcare, potentially facilitating the return to paid work for up to 1.7 million parents in England, as highlighted by The Women’s Budget Group network.
The average annual cost for full-time nursery care for a child under two in Britain, spanning 50 hours a week, currently stands at almost £15,000, as reported by the charity Coram.
Are you eligible?
Some two-year-olds in England were already eligible for 15 hours per week of government-funded childcare during term time under certain circumstances (for example if the family receives universal credit).
Now, it is available for all other families as well – where the parent or parents earn at least £8,670 a year, and less than £100,000 in combined income.
Parents transitioning into paid employment or boosting their work hours now receive immediate support, eliminating the need for subsequent claims, unlike the previous process.
How it works
Outlined in the spring budget in March 2023 by Chancellor Jeremy Hunt, the phased extension plan includes:
- April 2024: eligible two-year-olds will be entitled to 15 hours of childcare per week during term time. From this month, the government will also be increasing the amount it pays providers to deliver childcare: to an average of £11.22 per hour for under-twos, £8.28 for two-year-olds, and £5.88 for three and four-year-olds.
- September 2024: eligible children from nine months will get 15 hours of childcare per week during term time
- September 2025: eligible pre-school children between nine months and school age will get 30 hours of childcare per week during term time
Working parents of three and four-year-olds in England are currently eligible for 30 hours of free childcare per week during term time. The hours are available from the start of the term after the child reaches the relevant age.
All expansions should have fully rolled out by September 2025.
How to apply
For those residing in England, you can use this service to request a code to access your free childcare.
Setting up a childcare account is essential for this process, so prepare your details, including:
- Your National Insurance number, and if self-employed, your Unique Taxpayer Reference (UTR)
- The UK birth certificate reference number of each child
- Your work commencement date
It’s crucial to secure a valid code by the month’s end before a new term begins, but the term dates and deadlines are outlined clearly on the application page before you start, so you know whether you’re within the right time frame. The application typically takes about 20 minutes, and confirmation may take up to 7 days.
Upon approval, you’ll receive a code for free childcare to provide to your childcare provider.
Note: Scotland, Wales, and Northern Ireland operate distinct schemes – and if someone else already claims Tax-Free Childcare for the child you’re seeking free childcare for, your application won’t succeed.
The UK is the third most expensive country for childcare among members of the Organisation for Economic Co-operation and Development (OECD) behind Switzerland and New Zealand, so this is a welcome move by the government for parents nationwide.
Applications for the first phase have opened, but parents are advised to register between mid-January and the end of February.
