Five ways to cut the cost of childcare

1. Share the costs

Use websites and, as well as, to find families and nannies in your local area, and then share a nanny - and the cost.

2. Consider flexible working

Could you manage to work from home and watch your child? Anyone caring for a child aged six or under has the right to claim flexible working hours from their employer. You need to have been in your job for at least 26 weeks.

3. Use all your benefits

Families with at least one child are entitled to child benefit until 2013 (when payments will be stopped for families where either parent earns over £44,000 a year). You'll receive £20.30 a week tax-free for your eldest child, plus £13.40 for each additional child.

You can also claim child tax credits, which are based on your income and how many children you have. If you work more than 16 hours a week and pay for registered childcare, you can also claim some of the cost through working tax credits.

4. Utilise free childcare

Contact your local family information service ( to see what childcare arrangements and after-school clubs are running in your local area. Children aged three to four are eligible for at least 15 hours a week of early years care.

5. Childcare vouchers

Ask your employer about childcare voucher schemes, which are a form of salary sacrifice. Because you claim these benefits before tax, effectively you will be reducing your tax bill.

Basic-rate taxpayers stand to receive vouchers worth a maximum of £243 a month, while higher-rate earners can claim up to £124.