Poorest families will gain least from childcare vouchers

Childcare vouchers designed to help families with children will deliver more benefit well-off professionals than to people in poorer sections of society, economists have warned.
 
The Financial Times reports that parents in the top tax band stand to gain up to £200 more a year from a new tax-exemption scheme which is designed to make childcare, including nursery places, childminders and live-in nannies, more affordable.

The scheme, which is due to start on 1 April, allows employers to give parents £50 a week in vouchers, exempt from income tax and national insurance.

The Child Care Trust estimated that while this would help low income families to save about £800 a year, people in the top 40% tax band would be able to make savings of £1,000.

Because the vouchers are paid out per employee rather than per child, families that have two working parents stand to benefit the most, the trust said.

 

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