Independent research found that parents have been hit hardest by last year's changes to the tax system. They will also be hit by changes which come into force next April in which all households containing one higher rate taxpayer will be stripped of Child Benefit; even if total earnings are lower than parents where both go out to work but remain basic rate taxpayers.
Under the plans, all working parents with a child under school-age would be eligible for childcare loans which would be charged interest at three percentage points in excess of inflation. The main earner would start repaying the debt in instalments equal to 6% of their gross income above the income tax personal allowance, which will be £8,105 in the tax year that begins on April 6th.
A recent YouGov poll of parents with children aged under five found that 57% thought that the scheme was a good idea. A quarter of parents not currently using childcare and 28% of parents relying on friends or family said they would use the scheme if it were available.