Research shows working parents may benefit more from the current vouchers than the proposed TFC

working parent

Two thirds of working parents may well be better off under the current childcare provision rather than the new system, according to Sodexo Benefits and Rewards Services.

Currently many parents are part of workplace childcare voucher schemes, whereas the Government plans to scrap this system in favour of tax free childcare for all in autumn 2015.

The existing childcare voucher scheme helps approximately 400,000 working parents save nearly £1000 of tax and National Insurance annually on their childcare costs – a saving which could reach up to £1,866 per family if both parents are able to claim vouchers through their workplace.

The research, which encompassed the views of 600 parents between November 2014 and June 2015, showed that this value of this saving covers an average of 54% of a family’s childcare costs for children up to the age of 15.

However, Sodexo’s study claims that in allowing all parents up to £2,000 per child per year, the Tax Free Childcare scheme will cover just 20% of the average family’s childcare costs. The allowance will also be limited to children up to the age of 12.

Comparatively speaking, 66% of working parents will therefore be worse off under the new system.


Iain McMath, CEO of Sodexo Benefits and Rewards Services, said: “The Government’s intention to close the existing childcare voucher scheme to parents come autumn is a serious concern. Not only do many parents not realise that this change is being implemented, but, for those that are aware, there is little tangible information about Tax-Free Childcare. What is clear is that, whilst the new scheme is designed to encourage parents back to work, it is not designed with a child’s welfare at its core. Employers must use this time to help parents decide the best options for them.”

Helping employees support their dependents - whether children or elderly relatives - is a key topic at next week's Making Reward Personal conference, taking place in Central London on Thursday 9th July. For the full conference programme, and to register, CLICK HERE