Five fantastic ways to cut childcare and education costs

Childcare costs have shot up over recent years and now stand at an average of £385 per month for children between two and five and an incredible £729 a month for infants under the age of two.

Families with older kids are also facing a near-7% increase in the cost of clothing and an estimated 17% hike in the costs of school dinners. Fortunately, there are ways to cut your costs. Here are five of the best.
1. Take advantage of government schemes
You can cut childcare costs by using tax credits and the salary sacrifice childcare voucher scheme.

The voucher scheme, for example, can slash your annual bill by £1,000 by allowing you to pay your childcare costs out of your pre-tax income and therefore make tax savings of up to that amount.

However, your kids must be under 16 to qualify, while it is also only an option if your employer offers the scheme.

Another potential disadvantage is that the percentage that you pay in vouchers will not count towards the amount used to calculate the childcare tax credits you receive.

These are also designed to help working parents cover the cost of childcare, with families with a household income of £42,000 or less being the main recipients.

You may still qualify if your household income is above this amount though, so it's worth calling the tax credit helpline on 0845 300 3900 to find out if you can claim.

2. Share the cost of a nanny
The cost of hiring a full-time, live-out nanny is between £350 and £420 a week, although it can be much more in London.

However, families can halve the cost of using a nanny through specialist sites such as Nannyshare, which matches local families with similar needs. Figures from Nanyshare show that the practice has doubled year-on-year for the past five years.

The website's founder, Ben Black, said: "We're putting together about 300 families a month at the moment and I would estimate that we have helped 10,000 families over the last six years."

You can sign up to Nannyshare with a six-month subscription that costs £25 and includes the creation of your family profile and one free job posting.

3. Make use of free after-school clubs
While many after-school clubs and activities cost money, there are some that are offered free of charge at most schools. These generally include sports clubs offering extra tuition and playing time for young fans of rugby, cricket and athletics, for example.

Encouraging your child to take part could therefore help to save you money on the childcare necessary for those few hours between the end of school and the end of the average working day.

Mums or Dads who work part-time may also be able to work out a rota system with other parents in a similar position to avoid having to pay someone to fill in.

4. Move house rather than shelling out for private schools
It is only natural to want the best possible education for your child. For many parents, the best way to ensure this is to move to a postcode that is within the catchment area of a good state school.

A move of this kind does not come cheap, though. Research from estate agency website PrimeLocation shows that the average price of a home in the catchment area of one of the country's best state schools is £77,000 more than the national average.

The alternative – sending your children to private schools – is even more costly, however. Current fees mean that educating just one child privately from the age of five until he or she takes A–levels would typically cost about £170,000.

4. Look into ways to minimise private school fees
If you are determined to send your child to private school, one way to keep costs down is to opt for a day school, which comes at an annual cost of about £11,500, rather than a boarding school, which can cost in excess of £30,000 a year.

You could also check whether you might be eligible for a means-tested bursary, while those with gifted children could get a discount of up to 25% of the annual fees through academic scholarships.
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