The key advantage of the workplace nursery scheme is undeniably for parents.
Nursery costs are a huge expense, the average cost is £850 per month across the UK and this rises to above £1,100 in London. Parents with two children of nursery age are likely to be paying close to £2,000 a month – or simply choosing to have one parent at home as the nursery cost largely negates any income earned.
With a workplace nursery scheme, the savings are huge, this because it is a benefit that comes out at source, and so the parent saves on tax and National Insurance.
To give a few examples, a basic rate tax payer paying £850 per month in nursery fees would save £2,500 a year, if their nursery fees were £1,100 this saving would jump to more than £3,200.
If the parent is a high rate tax payer, the savings are £3,603 (against £850 monthly fees) and £4,700 (against £1,100 monthly fees). For an additional rate tax payer, the savings would jump again by at least £500.
To use a more extreme example, a parent on higher rate tax and with two children in nursery and so paying £2,200 in fees would save £9,400 a year.
We have a savings calculator so any parent can easily work out how much they could save.
As well as the savings, parents also have the benefit of knowing their child has childcare available and can even look to work extra days thanks to the savings available. With the money coming out automatically there is no administration, no bills to worry about.
The final benefit comes in the knowledge that by being part of a workplace nursery scheme, the nursery your child attends gets extra funding, better still parents help choose how this extra funding is spent.