Free childcare funding is being expanded to cover nine-month-old children from September 2024, but a think tank has warned that many working parents may still be unaware of the changes.
The upcoming childcare funding expansion in England follows changes in April 2024 that meant eligible working parents of two-year-olds could access 15 hours of free childcare. The funding is intended to help working parents that are struggling with childcare costs.
However, in the run up to April 2024 roll out, a survey by the department for education (DfE) found that two in five parents of under-twos were unaware of the extra funding. The data showed that awareness was lowest among the poorest families.
Financial relief for parents
Catherine Foot, director of Phoenix Insights, a longevity think tank that is part of the Phoenix Group, said: “The expansion of childcare funding to nine-month-olds is another step forward to support working parents in England manage the affordability of childcare.
“Over a third of parents of under-fives struggled to meet childcare costs last year, so extending the funding will provide some financial relief to this group.”
Savings boost
She added: “But it’s not just the short-term financial benefits. Parents who increase their working hours or return to work because of the new support will likely receive a boost to their retirement savings.
“Most people saving in a workplace pension pay a proportion of their salary to their retirement savings alongside an employer contribution, so any increase in earnings can increase pension contributions.”
She said that while the funding extension is welcomed, it is crucial parents are fully aware of what they are entitled to, particularly given the DfE survey findings in the run up to the changes last April.
“Many of these families face challenges balancing living costs, work and childcare, so it’s important they aren’t left in the dark about the support available.”
Further funding changes will come in from September 2025 when support will reach 30 hours for eligible working parents with a child from 9-months-old up to school age.
