Further to the short animation I made, I thought I'd put together this page for anyone looking for a bit more detail and background as to regarding our situation and how/why we paid as much nursery costs as we did.
DISCLAIMER - I am just a parent sharing my experience. I don't want to put anyone off having children, nor make it look more affordable than it is (by including the 'deductions' of various benefits that I got that other people may not be entitled to). I think budgeting is so vital for these difficult times and having an idea of what to expect is, hopefully, at least a partial insight.
Firstly, here is a spreadsheet of our costs/benefits by month. This isn't 100% accurate but it is as close as I could get considering I can't access some records anymore as they are over 12 months old, and I'm also speculating a little for the next few months, but I will update those as they go in.
Bearing in mind this was all before the new funding rules got made, so it's not an up-to-date picture of costs for 2 year olds. Although judging by this article the new funding isn't exactly solving the problem of affordability.
My husband and I both work, I am a freelance animator and he is a full time architectural designer. We live in the South East of England and we don't have any family nearby that could have helped with childcare.
I earned enough that I qualified for the full amount of government provided maternity allowance for the self employed. This just about covered my half of the mortgage whilst I was off work. I took 11 months off work, by which point I'd also burnt through my savings to make up for the short fall of the maternity pay.
In the UK, all parents of children under the age of 16 can receive child benefit. You need to earn under £60k or you'll be charged an increasing amount back until you are basically paying back the benefit. As of writing the amount paid is £25.60 a week for your first child. I was able to claim the full amount.
Once I started working again, my husband was on furlough because of Covid. This allowed us to send our child part-time to nursery, whilst he looked after her 2 days a week. We decided to still send her to nursery partially for socialisation, and to give my husband a few days to rest/do other tasks around the house etc.
In the UK if you are a working parent and each of you earn under £100k but at/ above the minimum living wage (details here), you can claim tax free child-care allowance. This gives you up to £500 every three months to put towards childcare. This knocks down your annual bill by £2k which we were able to use and definitely helped.
Once my husband returned to work, we then moved up to 5 days a week. This saw a significant increase in the cost as she was only 2 and at the time, didn't qualify for any free hours.
Once she turned 3 we were able to use the '30 free hours' system in the UK. In reality this is used as '22 stretch hours' as the 30 free hours were designed to only add up over school term time (I know, it doesn't make sense, nursery don't have school holidays...). This brought the cost down by about £400 a month, but doesn't result in 22 truly free hours a week because the vouchers the nursery receive from the government don't cover their running costs.
In addition to the stretch funding, our nursery were having staffing issues and so decided to reduce their opening hours to be able to maintain safe staffing levels. Luckily this didn't affect us too much, as we have quite flexible working. But we know it caused real problems for other parents. These reduced hours have persisted for the rest of our daughters time at nursery, although they did go back to their regular 'opening' time, they have had a slightly earlier closing time (although not as early at one point, when they needed to be collected by 5.30, which we know is when most people clock out of regular jobs!).
These reduced hours saved us between £50-£60 a month.
Another thing to consider is, what time of year your child is born. Not only does it dictate if they are an 'older' or 'younger' child for the year once they start school, but how many years you will be paying for childcare. In the UK you start school the September before you turn 5. Our daughter had friends in nursery who were only a couple of months older than her, and started nursery roughly the same time, but were starting school whilst she continued to go to nursery. So we were paying for an extra year of nursery because of her birth month.
I will be updating and amending this blog I'm sure, so please let me know any thoughts and anything else you'd like details on. I'll put some links below to information about the UK childcare and maternity system.