Save almost £100 a month on childcare

Working parents are being encouraged to see if they’re eligible for help with childcare costs.

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

According to official figures, the scheme is helping families save an average of almost £100 a month.

And while most families who use it have younger kids, there’s been a 20% increase in the number with children aged eight and above using it over the last year.

HMRC is now calling on other parents who might be eligible to see what help they could get.

“Tax-free childcare can help with your summer childcare plans and, looking to the term ahead, with whatever type of care you require for your child,” said chief customer officer Myrtle Lloyd.

“If you haven’t signed up already, do it today so you don’t miss out.”

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 your childcare costs.

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

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.

Register for tax-free childcare at GOV.UK.

Am I eligible for tax-free childcare?

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 

We should point out though that you can’t use tax-free childcare if you're already claiming universal credit or receiving childcare vouchers. 

So compare different options to see which one could give you the most support.