Free cash available for parents to help with summer holidays

As the summer holidays approach, many parents whose finances have been hit by the recession will be concerned about how to afford childcare over the coming months. July and August can be an expensive time for parents trying to make sure that their kids have fun in the long school holidays, but help may be at hand through financial support available.

Many parents could be unaware that they could be entitled to hundreds of pounds from the Government to help fund childcare costs. 470,000 families are already taking advantage of the childcare element of tax credits, but some families could be missing out.

Consumer champion Martin Lewis of MoneySavingExpert.com, is helping to raise awareness of the unclaimed tax credits and childcare vouchers.

“Times are tough for a lot of people, which is why it’s so frustrating that many aren’t claiming the literally thousands of pounds of extra cash they’re entitled to in childcare provision.

“Many assume that payments for the government are the preserve of the unemployed, yet actually there are serious funds out there to offset the costs for working families.

“Combining these elements can add up. For example, the average help for childcare from tax credits is £68 a week which has a huge impact. After all, it’s £3,500 a year. And don’t think of childcare as just something for babies in swaddling cloth, actually it can even be summer classes for 15 year olds – if you’re paying out, then you could be entitled.”

Here Martin Lewis outlines his four step plan for parents to make sure you are not missing out.

Step 1: Check you’re getting your tax credits for childcare

Possible Financial Value: Up to £240 a week

Single parents who work more than 16 hours a week, or couples who both work more than 16 hours a week with combined earnings under £40,000, who pay for any form of registered childcare should urgently check whether they’re entitled to tax credits for childcare. Families with childcare costs of more than £100 per week may be entitled to help at even higher incomes. The average help is £68 a week or £3,500 for a year – it only takes a quick phone call to see if you’re eligible.

The help is available for any child from birth up to age 15, or age 16 if the child is disabled. As well as help with nursery costs, parents with school aged children can get help through tax credits to help pay for holiday childcare, breakfast clubs and after-school clubs.

Even if you only pay for childcare in the summer holidays it’s worth checking.

For more information about how to claim call the tax credits helpline on 0845 300 3900 or your local Families Information Service on 0800 2 346 346.

Step 2: Are you eligible for childcare vouchers?

Possible Financial Value: £1,000 a year per parent on childcare costs

Many employers, large and small, offer childcare vouchers. These allow you to pay for any Ofsted registered childcare, for children up to the age of 15. You can receive vouchers from your employer up to £55 per week, or £243 per month, without having to pay tax or National Insurance. The savings over a year can really add up - talk to your employer about what they offer. In addition, both parents can receive childcare vouchers from their employers, even if you only have one child.

Do be careful though, childcare vouchers can affect the amount of tax credits you get. Visit moneysavingexpert.com/childcare for more information.

Step 3: Check out clubs and activities at your local school

Possible Financial Value: Provides free or low cost childcare in a safe environment

Throughout the year, many schools offer a range of activities for children, from sports coaching to dance and music sessions to drama classes. There are now over 14,000 extended services schools across England which offer Ofsted-registered childcare, as well as breakfast clubs, homework and study support and a range of fun activities such as sports, music, drama and art.

Don’t think your child can only attend classes at their own school, they can apply anywhere there’s something suitable.

To find out what’s on offer in your area, talk to your local school, call your local Families Information Service on 0800 2 346 346 or visit direct.gov.uk/childcare.

Step 4: Free early learning for children aged three or four

Possible Financial Value: Free childcare and early learning for at least 12.5 hours a week

Every three and four year old can get a minimum of 12.5 hours a week for 38 weeks of the year in a range of places including Sure Start Children’s Centres, nurseries, pre-schools and childminders. This will rise to 15 hours across England by 2010 and some Local Authorities may be delivering the 15 hours already.

The first step to claim your free place is to call your local Families Information Service on 0800 2 346 346 or visit direct.gov.uk/childcare.

For more information, visit moneysavingexpert.com/childcare