UK families are being urged to check today to see if they could save £2,000 or even more on annual bills. HMRC tax officials say more households than ever are taking advantage of Tax-Free Childcare to cut their childcare costs, as the government contributed nearly £600 million in Tax-Free Childcare top-up payments in 2025-26.
Record Number of Families Benefit
The latest statistics reveal a record 868,095 families are reaping the benefits of the scheme, saving thousands on childcare last year, as HM Revenue and Customs (HMRC) urges families to register ahead of the summer holidays. Tax-Free Childcare is a government-backed top-up scheme designed to cover approved childcare costs for children aged 11 or under, or up to 16 years old if the child has a disability. Working parents can save up to £2,000 annually per child, or £4,000 if their child is disabled.
HMRC Chief Customer Officer Encourages Sign-Ups
HMRC's Chief Customer Officer Myrtle Lloyd said: "I'm so pleased these figures show more families than ever are using Tax-Free Childcare to save on their bills. £2,000 is not a small amount and it can make a real difference – especially with the childcare void of the summer holidays approaching. If you haven't signed up yet, don't miss out, go to GOV.UK to do it today."
How the Scheme Works
Once a Tax-Free Childcare account is opened, for every £8 deposited by parents, the government adds £2 on top. Parents can receive up to £500 (or £1,000 if their child is disabled) every three months to assist with their childcare expenses.
The money can be spent on any approved childcare provision – including before or after-school clubs, childminders or holiday activity clubs. It's also available to cover any specialist equipment a childcare provider might require for a disabled child.
Eligibility Criteria
Families may qualify for Tax-Free Childcare if:
- they have a child or children aged 11 or under. Eligibility ends on 1 September following their 11th birthday. For disabled children, families receive up to £4,000 annually until 1 September after their 16th birthday.
- the parent and their partner (if applicable) earn, or anticipate earning, at least the National Minimum Wage or Living Wage for 16 hours weekly, on average.
- each earn no more than £100,000 per year.
- are not in receipt of Universal Credit or childcare vouchers.
Families can verify their eligibility and submit an application on GOV. UK. Tax-Free Childcare can be combined with the free childcare hours offer provided eligibility criteria are satisfied.
