Warning that a third of employers may discontinue childcare vouchers before new scheme is up and running in 2015

19th June 2013

Consultancy firm Jelf Employee Benefits has found a third of employers will scrap the Childcare Voucher schemes before Government replacement is available.

The Government proposes to introduce a new childcare voucher system from 2015. Yet research from Jelf Employee Benefits found that 36% of employers who currently offer a childcare voucher scheme are considering scrapping their existing scheme long before the replacement system is finalised or available.  Jelf says it is concerned that some employees may decide that they are not financially able to continue working.

Steve Herbert, head of benefits strategy, Jelf Employee Benefits says:  “With more than 2 years before the proposed replacement scheme is available, it’s difficult to see why employers would want to remove their Childcare Voucher offering earlier.  Although the percentage of employees who use this benefit is relatively low, for those that do, it is often a key incentive, and an important bridge to meeting the ever growing costs of childcare in the UK.  If employers remove this benefit now, they risk losing key employees, and disengaging many others.”

Jelf is also highlighting that there are some key changes between the existing schemes, and the proposed replacement in 2015. The new system is intended to only be available to two parent families where both parents work, and is only initially targeted at children under age 5, whereas the current system is available for two parent families with only one income, and for most school age children.  It is proposed that those who will be worse off under the new system will be able to retain their existing rights, yet crucially this may only be available where employees are able to continue to save in their current provision in the run up to the 2015 change.

Herbert adds: “If employer’s pull the plug on their Childcare Voucher offering  prior to the commencement of the new system, they are condemning their workers to a period with no Government support for this significant daily cost, and also potentially preventing some parents from ever again being able to achieve such support in the future. Jelf would therefore strongly urge employers to consider the implications to both employees and employer before any decision to remove Childcare Vouchers is taken.”

9 thoughts on “Warning that a third of employers may discontinue childcare vouchers before new scheme is up and running in 2015”

  1. Pavlaki says:

    ‘Morning Shaun, your predictions yesterday about the poor Eurozone data were spot on and yet at the moment the data was released (early this morning) the Euro shot up against the pound! If I was puzzled yesterday, I am even more so today! I am not a forex trader, not even an amateur one, but I do find the currency gyrations fascinating, if lacking in logic.

    1. Anonymous says:

      Hi Pavlaki

      I have a feeling that the UK Pound £’s run against the Euro is over for now. One factor in the background is that the ECB’s balance sheet continues to shrink as each Friday more of the LTROs gets repaid. Last week it was another 4 billion Euros as we await tomorrows news.

  2. Forbin says:

    Hello Shaun,

    but ” ……if investors are willing to accept a return of 1% per annum for ten
    years what does that imply for expectations of economic growth and
    inflation in Germany?”

    Doesnt this mean they think that the ROW will be a lot worse off ? Germany as a safe haven ?

    you know , from Bail-ins ?

    Forbin

    PS: and aren;t they just canny investors avoiding negative rates from the ECB?

    1. Anonymous says:

      Hi Forbin

      The safe haven argument is a fair point. Although other Euro nations are seeing much lower bond yields too as for example even Portugal has a 10 year yield of 3.54%. For a country that needs a default of some sort that is rather extraordinary…

      Does it mean though if we take that logic further that the UK (10 year 2.44%) and the US (10 year 2.4%) are considered bail-in risks?

  3. zummerzetman says:

    ‘Germany seems to have adopted the British ‘blame the weather’ attitude to poor economic statistics’.
    So we all need to be in the weather equivalent of the ‘goldilocks zone’ to achieve consistent growth now? It’s a shame about the mounting evidence of climate change then. With all the extreme weather events we’ll never get the right conditions for recovery!!

    1. Anonymous says:

      Hi Zummerzetman and welcome to my part of the blogosphere

      It is a feature of weak economic statistics these days that the weather finds itself taking at least some of the blame. The US 1st quarter of 2014 was an example and the UK has had several such experiences but currently does not require them. Perhaps the oddity in today’s data was that Germany blamed the weather but it in fact helped keep France from a decline.

      “Global expenditure on energy bounced back in Q2 (+3.5% after –3.9%) after rather soft weather conditions in winter.”

      If the UK was looking for something to blame then the hailstorms and mini-monsoons of this week in SW London would no doubt be used!

  4. Fraser Bailey says:

    The news about Barosso’s son should be on the front page of every newspaper in Europe. But it won’t be. We are now inured to nepotism, corruption and incompetence in Europe. We are now little or no better than South America and Africa.

    1. Anonymous says:

      Hi Fraser

      it is rather extraordinary isn’t it? Especially the bit that no interview was required for someone who has no previous experience! As the Algarve Daily News put it.

      “Luis Barroso was hired without competition for the Prudential Supervision Department. The rule in the bank is for open contests for posts, unless ‘proven and recognised professional competence’ has been established.”

    2. Noo 2 Economics says:

      “We are now inured to nepotism, corruption and incompetence in Europe” And the UK.

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