Parents can save up to £2,000 a year on childcare for new school starters

Working parents whose child is starting school for the first time in September could save thousands of pounds on the cost of childcare.

Tax-free childcare can be used to pay for approved childcare, including childminders, wraparound care, after school clubs or school holiday care.

Parents can get financial support of up to £2,000 a year per child, or £4,000 if their child is disabled.

You could be eligible if you:

• have a child or children aged 11 or under (or up to 16 if your child has a disability)
• you and your partner (if you have one) earn or expect to earn at least the national minimum wage or living wage for 16 hours a week, on average  
• each earn a maximum of £100,000 a year 
• don’t receive universal credit or childcare vouchers    

How does tax-free childcare work?

For every £8 you deposit in a tax-free childcare account, the government tops it up by £2.

So you could get up to £500 (or £1,000 if your child is disabled) every three months to put towards the cost of childcare.

After you’ve opened an account, you can deposit money and use it straight away or leave it until you need it.

You can also withdraw unused money in the account whenever you like.

Check eligibility criteria and register for tax-free childcare at GOV.UK.

Scheme ‘makes it easier for parents to get back into work’

“We are putting more money into the pockets of working people, worth up to £2,000 per year,” said Darren Jones, chief secretary to the Treasury.

“This will make it easier for parents to get back into work as we go further and faster to grow the economy.”

Myrtle Lloyd of HM Revenue & Customs added: “Starting school can be an expensive time.

“There’s a lot to buy and there’s also a lot to organise. 

“Now you know where your child is going to school, you can start organising your childcare and tax-free childcare can help make the costs more manageable.”