Working families across the UK are being urged to act fast and save up to £2,000 before April to avoid missing out on vital tax-free childcare benefits. Experts have issued a stark warning that parents who fail to top up their accounts risk losing hundreds of pounds in government support.
The April Deadline Looms
With just weeks remaining until the new tax year begins on 6th April, financial advisors are encouraging eligible families to maximise their contributions to the Tax-Free Childcare scheme. For every 80p deposited, the government adds 20p – effectively offering 25% free money towards childcare costs.
How the Scheme Works
The Tax-Free Childcare programme allows working parents to:
- Save up to £2,000 per child annually
- Receive a 25% government top-up on deposits
- Use funds for Ofsted-registered childcare providers
However, there's a crucial catch – any unused government top-ups expire after three months. This means families must keep their accounts active by making regular deposits.
Why April Matters
The end of the tax year presents a unique opportunity for parents to:
- Maximise their annual £2,000 allowance per child
- Ensure they don't lose any accumulated government contributions
- Prepare for increased childcare costs during school holidays
Sarah Coles, head of personal finance at Hargreaves Lansdown, emphasised: 'Families need to act now to make the most of this financial lifeline. Missing the deadline could mean throwing away hundreds of pounds in free childcare support.'
Eligibility Criteria
To qualify for Tax-Free Childcare, parents must:
- Be in work and earning at least £152 per week
- Have a child under 12 (or under 17 for disabled children)
- Not be claiming Universal Credit, Tax Credits or childcare vouchers
With inflation squeezing household budgets, financial experts stress that these government-backed savings could make a significant difference for working families across the country.
