The UK expands free childcare: how to claim up to £7500.

According to The Sun: From today, thousands of parents can claim back up to £7,500 for childcare expenses due to significant changes in government policy.

Working families now have the opportunity to receive 30 hours of free childcare per week during term time for children aged between nine months and four years.

PA

If you are eligible for the full 30 hours of free childcare, you could save £7,500 a year.

Care must be provided by a registered provider, such as a nursery, playgroup, or school.

Applications can be made from the time your child turns 23 weeks, but funding will begin at the start of the term.

This means that it is already too late to apply for this term, but you can apply before the start of the next terms in January or April.

Payments will be made once your child turns nine months old.

The amount of free childcare depends on your circumstances, including whether you work, your income and immigration status.

The introduction of additional free hours of care for working parents today marks the end of the third phase of the scheme's expansion.

The first phase began in April 2024, allowing parents of two-year-olds to apply for 15 hours of free childcare.

In September 2024, the second phase allowed parents of children aged nine months to three years to receive 15 hours of free childcare.

Previously, only parents of three and four-year-old children in England could access 15 free hours.

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The government has stated that parents who use the full 30 hours will save approximately £7,500 a year.

Who is eligible for support?

Support will be available for most parents whose children are aged between nine months and four years.

However, you must be employed or about to start work, as well as having an income above a certain threshold.

To qualify for help, you (and your partner, if applicable) must be:

• In work or starting a new job
• On sick leave or annual leave
• On maternity, paternity or adoptive leave

You may also qualify if your partner is working and you are on parental leave or receiving any of these types of benefits:

• Disability living allowance
• Severe disability allowance
• Caretaker's allowance
• Limited capability for work
• Experience and support allowance

In the next three months, you and your partner (if applicable) must earn at least:

• £2,539.68 before tax if you are 21 or older (equivalent to £195.36 per week)
• £2,080 before tax if you are aged 18 to 20 (equivalent to £160 per week)
• £1,570.40 before tax if you are under 18 or a student (equivalent to £120.80 per week)

This corresponds to the national minimum wage or living wage for 16 hours a week.

If you work for the year but do not receive a regular wage or are self-employed and do not expect to earn enough in the next three months, you can use the average expected income for the current financial year.

What support is available for parents with childcare costs?

Childcare can be expensive. Here’s how to get help:

• 30 hours of free childcare – Parents of three and four-year-olds can apply for 30 hours of free childcare per week if they work at least 16 hours a week at national minimum or living wage and earn less than £100,000 a year.
• Tax credits – Families with children under 20 may receive help with childcare costs.
• Tax-free childcare – Available to working families and the self-employed, for every £8 you spend, the government will add another £2.

How to apply

Families in England can apply for free childcare hours through the gov.uk website.

First, you need to create a childcare account. If your application is approved, you will receive an 11-digit code confirming your entitlement to free childcare.

This code must be provided to your childcare provider.

To continue receiving free hours of care, you need to confirm your details every three months through your account.

When applying, you will need to prepare some personal information, such as your national insurance number and tax payer identification number (UTR) for the self-employed.

You will also need to provide the registration number of your child's birth certificate in the UK (if applicable) and the date when you start or plan to start work.

Completing the application will take about 20 minutes.

New rules could raise nursery prices

Despite positive news for families, experts have warned that this move could actually lead to increased prices at nurseries.

A new study by the Institute for Policy Research at the University of Bath noted that the expansion of free childcare does not match the dynamics of nursery price increases and could lead to higher costs in some areas.

The study analyzed prices over the past 18 months and found that rates for nurseries rose faster in regions with the least government funding.

In 'childcare deserts' where three or more children compete for one available spot, a spike in demand due to expanded parental rights could lead to higher charges for hours that parents still pay for.

In most areas of England, funding for three and four-year-olds is lower than the average hourly rate, forcing nurseries to make up the shortfall by raising prices for younger children.

And in the year to March 2025, nurseries in the least funded half of the UK increased their prices significantly more than those in more affluent areas.