Thinktank moots £10k govt loan scheme for childcare

Parents should be able to borrow money from the government to cover childcare costs, in a similar way to student loans, a thinktank has suggested.

The Social Market Foundation (SMF) has proposed a national childcare contribution scheme which would allow parents to borrow up to £10,000 to pay for childcare, reports the Guardian.

In a similar system to student loans, the money would then be paid back through wages. 

The SMF said the proposals, set out in a report, would make it more financially viable for parents to return to work and extend access to formal childcare.

Those applying for the scheme would be given the money upfront through a voucher scheme.

The loan would attract interest at 3% above inflation, as measured by RPI, and the main earner would repay at a rate of 6% of earnings above the personal allowance.