With childcare costs in the UK rocketing, amid the general cost-of-living crisis, your employees with families will no doubt be feeling the financial pressure. But, by providing access to our Childcare Salary Sacrifice Scheme, you can help them make significant savings. So, here we look at the advantages to them of opting in, and the benefits this could bring to your business.
Why do your employees need this benefit?
The Mintago Childcare Salary Sacrifice Scheme is likely to be a popular benefit to offer your employees with families, as the cost of providing care for children can put tremendous financial strain on working parents. With this scheme, you can help them cut costs and significantly ease the stress they may be facing.
Indeed, according to a recent survey, one in four UK parents have had to quit a job or leave education to avoid the rising cost of childcare. In fact, this survey also found that 74% of UK parents say that they find it difficult to meet childcare costs. In addition, 65% have had to make major financial changes to their lives to pay for childcare, including spending less on their children’s food and taking on more work, and 22% spend between 30% and 70% of their income on childcare.
Furthermore, these findings also revealed that parents in the UK were having a tougher time being able to afford childcare costs than those in the US, Netherlands, Turkey, Brazil, India and Nigeria. So, more help is definitely needed. While the UK Government currently offers some support for eligible working parents, it has announced that this will be expanded shortly, outlining details on The Childcare Choices website. This will include providing several hours of childcare for younger children, and although this will go some way to help improve matters, further assistance for full-time working parents will still undoubtedly be needed.
What is Childcare Salary Sacrifice?
Mintago’s Childcare Salary Sacrifice Scheme enables your employees to pay for their children’s nursery fees on a salary sacrifice basis, cutting their costs by up to 47%. In essence, it provides a more tax-efficient way of paying for childcare. Your staff just choose if they want to opt in and sacrifice a portion of their salary, pre-tax as payment. They then have higher take-home pay, as a result of paying less Income Tax and National Insurance.
This could make a huge difference to your hard-working employees who are struggling to make ends meet. Our scheme is very versatile, as it covers 2,000 nurseries and, if setups for additional nurseries are requested, these normally take just two to three weeks, with an 80% to 90% success rate. Nurseries that are OFSTED approved qualify for the scheme, but childminding does not.
How does our Childcare Salary Sacrifice Scheme work?
Our Childcare Salary Sacrifice Scheme is very straightforward and easy to adopt. All implementation, nursery liaison and employee changes are managed for you, and you do not incur any penalties for employee exits. All your staff are eligible to opt in, as long as their salary sacrifice amount does not reduce their incomes below the national minimum wage. They simply express their interest to join the scheme through the Mintago platform benefits page.
The scheme is good value for employees and employers, as there are no costs for your staff to opt in and it is cost-neutral for your business, with savings of 1.38% of the salary sacrificed amount. So, it really is a great arrangement for you and your employees.
How can this benefit your business?
In fact, by offering the Childcare Salary Sacrifice Scheme to your employees, your business could reap substantial benefits. If you ease the financial pressure on parents at your company in this way, you could help to improve their performance in the workplace, as financial worries can cause significant stress and loss of productivity among your employees. Indeed, recent Mintago research found that 32% of respondents reported that they struggled with day-to-day tasks, as a result of financial concerns and 43% said they had lost sleep for the same reason. While this is definitely not good for them, it is also bad for your business.
However, the advantages to your company of implementing this scheme do not end there, as it could also help to improve diversity and inclusion at your organisation. With many women leaving the workplace due to childcare issues, this could help to keep more of your female workers in their jobs for longer, benefitting them and your business. Not only does this give them the chance to achieve their career goals, but it enables you to retain experienced and skilled female employees. This could be especially advantageous, when you consider recent research has shown that companies with more women on their executive teams actually outperform those with fewer.
Furthermore, by offering this one, straightforward benefit to your employees, you could reduce absenteeism and boost staff loyalty, by making life a little easier for them. While it may not be possible to offer your workers a pay rise, in the current financial climate, our Childcare Salary Sacrifice Scheme provides a cost-effective way to support your team in these challenging economic times.
For further details on how to implement Mintago’s Childcare Salary Sacrifice Scheme, contact us today.