Choosing childcare as a new parent can feel overwhelming. Here’s a summary of the different options available to help you find what works best for your family and budget.
Using a registered childminder
Childcare costs
The cost of childcare will depend on the option you choose and where you live. For a rough idea of childcare costs, see our guide Average childcare costs.
Someone who looks after children in their own home and is registered with one of the following in:
- England: Ofsted
- Scotland: Care Inspectorate
- Wales: Care and Social Services Inspectorate
- Northern Ireland: Health and Social Care Trust
Pros
-
They’re self-employed, so you don’t have to worry about paying their tax or National Insurance (NI) contributions.
-
As long as they’re registered or approved, you might be eligible for help to pay for your childcare using Tax-Free Childcare. If you’re eligible for Universal Credit, you might be able to claim back up to 85% of the monthly childcare.
-
Many childminders work flexible hours and pick up/drop off children at school or playgroup.
-
You can use your free childcare hours if you’re eligible.
-
Some childminders will still be open during school holidays and may be able to take young children who are not yet in formal education.
Cons
-
You’ll need to make other arrangements if the childminder is ill or on holiday.
Find a registered childminder on GOV.UK
Choosing a day nursery
Day nurseries offer care and education for children aged six weeks to five years.
They might be run privately or by community organisations, local authorities or employers.
Pros
-
They’re usually open weekdays from 8am to 6pm, which fits most working hours.
-
Nursery fees are sometimes subsidised by local authorities or employers.
-
You can use your free childcare hours if you’re eligible. Find out more in our guide Help with childcare costs.
-
As long as they’re registered or approved, you might be eligible for help to pay for your childcare using Tax-Free Childcare. If you’re eligible for Universal Credit, you might be able to claim back up to 85% of the monthly childcare.
Cons
-
They’re usually more expensive than childminders – see our guide Average childcare costs.
-
You usually must pay the fees when you’re on holiday.
Employing a nanny
Someone who looks after a child in the child’s own home. It’s usually a live-in or daily role, but part-time nannies are also available.
Nannies can voluntarily register with Ofsted.
Pros
-
Your child is cared for at home.
Cons
-
You’ll be their employer, and responsible for paying their Income Tax and NI contributions.
-
As an employer, automatic enrolment means you’ll have to pay into a pension for your nanny if they are at least 22 and earn more than £192 a week (£833 a month) before tax. Find out more information about the duties as an employer from The Pensions Regulator
-
You’ll need to make other arrangements if they’re ill or on holiday.
-
As long as they’re registered or approved, you might be eligible for help to pay for your childcare using Tax-Free Childcare.
Find out more about employing a nanny on GOV.UK
Find out more about automatic enrolment on Nannytax
A live-in au pair
What is it?
Someone who lives with you and learns the local language and culture while providing around 30 hours’ childcare and help around the home.
Pros
-
They should be paid National Minimum Wage or National Living Wage. See our guide Average childcare costs.
-
They’re usually treated like a member of the family rather than an employee, so you won’t have to deal with their tax or NI.
Cons
-
You’ll need to factor in the cost of their room and board on top of what you pay them.
Find out more about employing an au pair on GOV.UKOpens in a new window
Using a playgroup or pre-school
What is it?
Community and voluntary-run care and education sessions for three to five-year-olds.
They usually offer a three-hour morning or afternoon sessions during term time.
Pros
-
A low-cost option – see our guide Average childcare costs.
-
You can use your 15-30 hours free weekly childcare allowance if your child is eligible.
-
As long as they’re registered or approved, you might be eligible for help to pay for your childcare using Tax-Free Childcare. If you’re eligible for Universal Credit, you might be able to claim back up to 85% of the monthly childcare.
Cons
-
You’ll need to find alternative childcare to cover the school holidays and/or the rest of the day.
To help parents and carers who work (or want to work), the government will fund schools and local authorities to increase the care they can provide, so all school-age parents and carers can drop their children off from 8am and pick them up around 6pm.
Find a local playgroup or pre-school on GOV.UK
A Sure Start Children’s Centre
Pros
-
A low-cost option – many of the services are free. See our guide Average childcare costs.
-
Because they’re a ‘one-stop shop’, you can also get advice on other things – for example, training and job opportunities.
-
You can use your free childcare hours if your child is three or four. if your child is three or four.
-
As long as they’re registered or approved, you might be eligible for help to pay for your childcare using Tax-Free Childcare. If you’re eligible for Universal Credit, you might be able to claim back up to 85% of the monthly childcare.
Cons
-
Not all centres allow you to leave your child there all day.
Find a Sure Start Children’s CentreOpens in a new window on GOV.UK
Nursery school
An introduction to primary education for three to five-year-olds. They’re often attached to a pre-school or primary school. Open during school hours in term time.
Pros
-
They’re usually free if attached to a primary school.
-
Your child will be taught by qualified teachers.
-
You can use your free childcare hours if you’re eligible.
-
As long as they’re registered or approved, you might be eligible for help to pay for your childcare using Tax-Free Childcare. If you’re eligible for Universal Credit, you might be able to claim back up to 85% of the monthly childcare.
Cons
-
You’ll need to find alternative childcare to cover the school holidays.
Find a local nursery school placeOpens in a new window on GOV.UK
Relying on family or friends
There’s the option of having a family member or friend look after your child. This can be for free, payment or an arrangement where you look after each other’s children – this is called ‘reciprocal childcare’.
This might seem like a convenient and affordable option – but the rules around these arrangements can be complicated.
Pros
-
A family member doesn’t have to be registered with Ofsted if they’re providing free childcare.
-
People who look after their grandchildren to allow the children’s parents (or carers) to go out and work could be entitled to Specified Adult Childcare credits – a benefit to increase their future state pension.
Cons
-
Legally, you can’t use a friend to regularly look after a child under eight years for more than two hours a day during normal working hours unless they’re a registered childminder. This is something to think about if you have a reciprocal childcare arrangement.
Find out more about the rules around informal childcareOpens in a new window on Netmums
Specified Adult Childcare credits
This scheme is aimed at family members – usually grandparents – who stop work to help look after a child.
They might benefit from it if they haven’t built up enough National Insurance (NI) contributions to qualify for the full state pension.
The carer might be eligible if they’re:
- over 16, but below State Pension age
- related to the child. Grandparents are the most common carers, but any family member can claim.
To be eligible, the child needs to be under 12 years old and the:
- parent (or main carer) is entitled to Child Benefit
- parent has a qualifying year of NI contributions they’re willing to transfer to the carer
- parent (or main carer) agrees to the application. You might not agree if, for example, you’re not returning to work and need the NI contributions.
Find out more about your eligibility and how to applyOpens in a new window on GOV.UK
Applications for a particular tax year cannot be made until the following October. This allows NI records to be up to date for the previous tax year.
To make a claim download an application formOpens in a new window on GOV.UK
Help with childcare costs
Remember, it’s never too early to start planning for the cost of childcare.
You don’t need to be on a low income to get help with childcare costs. There are lots of places to get help.
Find out more in our guide Help with childcare costs
Choosing the right childcare option
Demand for childcare places is high, so it’s never too early to start researching your options.
Costs vary a lot depending on where you live, so it’s a good idea to find out what you can expect to pay in your area.
For UK and London averages, see our guide Average childcare costs.
You can work out whether the childcare you want is affordable by comparing the costs with your disposable income after essential outgoings.
Budget planner
To help you manage your money, try our free and easy-to-use Budget planner.
