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Free childcare allowance to rise to a maximum of £2,000

As many as 1.9 million working families could benefit from a tax-free childcare allowance worth up to £2,000 per child from 2015-6, ministers are to announce.

18 March 2014
child income

The new scheme, first outlined last year will be brought in sooner; and the maximum parents will be able to claim is to rise by £800.

David Cameron will say the move, coming ahead of Wednesday's Budget, will help ease families' financial worries.

But Labour said the assistance was a case of "too little, too late".

The parties are making rival offers to help families deal with the spiralling cost of childcare, which the opposition says has risen by 30% since 2010.

According to the Family and Childcare Trust, the average nursery cost for a child under two rose by 4.2% last year to £106.38 per week for a part-time place (25 hours) while a full-time place costs £11,000 for a year.

At the moment, employees of participating companies can reduce their childcare costs through a tax-free voucher scheme, although only about 5% of UK employers and 450,000 families are signed up to it.


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