Working families are being urged to check their eligibility for Tax-Free Childcare on Playday, the national day for play, on Wednesday – with those using the scheme saving an average of almost £100 a month.
How the scheme works
HM Revenue and Customs (HMRC) is highlighting the scheme, which provides a £2 government top-up for every £8 deposited into an account, up to a maximum of £2,000 a year per child or £4,000 for a disabled child. The support can be used for approved childcare including nurseries, childminders, holiday clubs, breakfast clubs and after-school clubs. Nearly 75,000 providers now accept the payments.
Eligibility and usage
Accounts can be opened for children aged up to 11, or up to 16 where the child has a disability. Parents are generally eligible if they have a child aged 11 or under (or 16 if disabled), earn at least the National Minimum or Living Wage for an average of 16 hours a week, and each earn no more than £100,000 a year. Those receiving Universal Credit or using childcare vouchers cannot claim.
The scheme can be combined with government-funded childcare hours where eligible. Statistics for March 2026 were released in May. Further guidance on combining support is available through the Best Start in Life parent hub.
Flexible savings
Money can be spent straight away or saved for later use, and any unused funds can be withdrawn at any time. Families can receive up to £500 in top-ups every three months, or £1,000 for a disabled child.
While most users have younger children, the number of families claiming for those aged eight and over rose by more than 20% compared with the previous year, according to the latest figures.
Call to action
Myrtle Lloyd, HMRC’s chief customer officer, said: “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. If you haven’t signed up already, do it today so you don’t miss out. Go to GOV.UK and search ‘Tax-Free Childcare’.”
