12 Reasons Why the Salary Sacrifice Nursery Scheme Benefits Your Nursery
From additional employer funding to a genuine competitive edge
Additional funding from the employer
When a parent uses salary sacrifice to pay nursery fees, the employer makes a financial contribution to the nursery as part of the scheme. This is a requirement of the HMRC rules that govern the benefit: the employer must have a genuine financial commitment to the nursery.
In practice, the nursery receives funding from two directions. The parent pays their nursery fees as normal, and the employer contributes separately. That employer contribution represents income the nursery would not otherwise have had.
Dependable income
The employer's involvement is formalised through a contract. It sets out the arrangement, the contribution, and the term. For the nursery, that means the income is reliable and predictable. That additional funding is contractually committed for the length of the arrangement, independent of whether the child withdraws from the nursery.
In a sector where the gap between running costs and government-funded hours has become increasingly difficult to manage, having a reliable income that arrives contractually allows for improved forecasting and makes planning for the funded places an easier prospect.
Payments arrive before fees are due
Cashflow is one of the more persistent operational pressures for nurseries. Using our scheme, all funds and fees arrive at the nursery before the month in which the fees are payable, not after. The nursery is not in the position of having already delivered care and then waiting to be paid. There is no need to chase payment from parents, payments will arrive directly into your bank account before they are due.
Integration with nursery management software
Feel The Benefit can integrate directly with API-enabled nursery management systems. For nurseries using software to manage fees, occupancy, and accounts, this means scheme payments and employer contributions feed through your systems directly. The nursery has the data it needs, in the system it already uses.
How much do the families at your nursery actually save?
To understand why this scheme keeps families in your nursery for longer, it helps to see the numbers. A typical employer with 10 employees on the scheme generates over £39,057 in combined savings per year across the team, and your nursery benefits directly from that financial stability.
Total projected annual savings
Based on 10 employees & London nursery costs. Click to view a detailed breakdown of savings
A business perspective from partnering employers
Partnering with employers through the scheme creates a relationship that does not usually exist between a nursery and the companies its parents work for. Employers that engage with the nursery are required to provide some managerial contribution to the nursery, and this is an opportunity for the nursery. It can open conversations about business planning, communication, effective management, dealing with common business issues, as well as the nursery's longer-term direction, conversations that offer a perspective from the commercial world that nursery owners do not always have easy access to.
Insight from a parent perspective
Parents have a meaningful and structured route to communicate with the nursery in a constructive and collaborative environment which can be valuable to a nursery whose main focus is often likely to be the children, and so having the constructive insight of the parents in a meaningful and considered setting can provide the nursery with an external perspective that they may not often be able to get. As meetings are required as part of the scheme, each meeting is an essential element to ensuring the additional income to the nursery on a typical contract. Where multiple parents and employers are involved in the same meeting, this can create valuable collaboration and is an extremely effective hourly rate of hundreds of pounds an hour for your staff who are involved in these meetings.
Parents can manage fees that reflect the true cost of care
A parent using the Feel The Benefit scheme can save up to 56% on the net cost of their nursery fees. This means a nursery can set fees at a level that reflects its actual costs and that keeps the business financially sustainable, while those same fees remain affordable for parents who would otherwise find them difficult to manage. The nursery does not have to choose between what it needs to charge and what parents can pay.
Addressing the free hours funding gap
The underpayment of the government-funded free hours entitlement is well documented across the sector. Many nurseries have little choice but to subsidise the funded hours with income from fee-paying families. Additional income from the Feel The Benefit Workplace Nursery Scheme creates a more sustainable position. By providing additional income to nurseries, each nursery on our scheme has an extra financial cushion to avoid passing the full cost to parents or running those free funded hours at a loss.
Planning with more certainty
Contracted income is dependable. You can identify longer term projects and ambitions and clearly identify additional funding that can be put to one side and used for future plans for the nursery, whether new facilities, new equipment, additional staff, enhanced staff training or additional resources for either the staff or the nursery.
Referral earnings for nursery staff
Every member of nursery staff who introduces a parent to the scheme can earn £50 for each successful referral. For staff working in a sector that is consistently under pressure on pay, and who often work in the industry because they do work they love rather than for a higher rate of pay, this is a straightforward additional income opportunity that requires only a conversation with a parent already attending the nursery.
The scheme works best when nurseries are active partners in it
The nurseries that get the most from the Workplace Nursery Scheme are the ones that lean into it: telling prospective parents about it, mentioning it to staff so they can refer families, and working with us when a new employer partnership is being set up.
That does not require significant time or effort. A short paragraph on your website, a mention at settling-in appointments, and a willingness to be introduced to local employers is all it takes. We do the rest.
Contributions from employer partners
Partnering employers can also contribute materials to the nursery: stationery, paper, suitable merchandise and unused promotional items. What is appropriate is always discussed through the partnership, but for a nursery that spends on consumables every week, supplies that do not come from the nursery's own budget are a practical benefit. Sometimes these can be more esoteric items and can differ between employers and nurseries but opportunity exists to make the partnership as meaningful as possible. Every nursery has companies nearby that could provide old laptops, monitors and other tech equipment. It may be that as a business you actively want a business mentor or additional business insights and perspectives to help you deal with the challenges of running a business. The partnerships these agreements include provide that opportunity for your nursery to obtain external advice without any cost, in fact, you are being paid for it.
A genuine differentiator for prospective parents
For a parent choosing between nurseries, fees are often the single most significant factor after quality and location. A nursery that partners with the scheme can offer parents the ability to reduce the net cost of their fees by up to 56% through salary sacrifice. To be clear, the fees the nursery charges do not change but how much the fees actually impact on the employee's take home pay does. To see how this works in practice, please use our savings calculator.
This impacts on any prospective parent considering their options while choosing nurseries. It changes how the nursery compares with others that do not offer the same scheme. And for parents who might otherwise be stretching the decision over several months, or considering a less expensive alternative, it gives a clear and practical reason to choose the nursery and to get started.
Ready to find out more?
Feel The Benefit helps employers set up Workplace Nursery Schemes and works directly with nurseries throughout the partnership. If you run a nursery and would like to understand how the scheme would work in practice for your setting, contact the team at feelthebenefit.co.uk.
Twelve reasons at a glance
Interested in joining the scheme as a nursery partner?
Our team would love to talk you through how the Workplace Nursery Scheme works in practice for your setting. Call us on 0800 888 6629 or send us a message and we will take it from there.
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