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Should the government encourage parents to take out a loan?

Should the government encourage parents to take out a loan?

Iain McMath, managing director of Sodexo Motivation Solutions, a leading childcare voucher provider, comments on the latest &pound10,000 & lsquo;student loan’ for childcare being proposed by the SMF

“At a time when the cost of living is on the up, and job uncertainty is rife, parents may see a loan as a very last resort. &pound10,000 per year doesn’t even cover half the yearly costs of some fulltime, London based nursery schools. If the loan starts at &pound10,000 in 2012, what will it look like in 2, or even 10 years time when you take into account interest payments and inflation?

Rather than encouraging parents to take a loan, the government should be looking to help parents in other ways such as promoting the use of childcare vouchers or extending childcare vouchers to the self-employed. These tax free schemes are available to working mothers and fathers and are a great way of subsidising childcare costs, especially when both parents are working.”

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