Working parents encouraged to sign up to savings scheme

Working parents are being urged 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.

And with the October half-term just around the corner, HM Revenue and Customs (HMRC) wants to make sure eligible households don’t miss out.

“Paying for childcare while you work doesn’t have to be a nightmare for your bank balance this Hallowe’en,” said chief customer officer Myrtle Lloyd.

“Tax-free childcare can make a real difference.”

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.

How much have families saved?

According to official figures, each family had an average of £93 added to their savings pot in June, when more than £55m of government money was added to tax-free childcare accounts.

This was split between more than 600,000 families.

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.