HMRC has urged parents to check if they can claim tax-free childcare savings worth up to £2,000 a year per child. It comes as new data shows nearly 826,000 families benefited from the scheme during the 2024/25 tax year.
The scheme provides working families with children up to the age of 11, or 16 if their child has a disability, with up to £2,000 a year per child or £4,000 a year if their child is disabled, to put towards any approved childcare. This includes holiday clubs, breakfast and after-school clubs, childminders and nurseries. Latest figures from HM Revenue and Customs (HMRC) show that in March 2025, 579,560 families in the UK used the scheme to save on their annual childcare bills, an increase of 81,770 families compared to the previous March.
Myrtle Lloyd, HMRC’s director general for customer services, said: “Summer can be an expensive time if you have children. Whatever you’re planning, Tax-Free Childcare can give your plans a welcome financial boost. Go to GOV.UK to start saving today.”
Eligible parents must open a Tax-Free Childcare account through the GOV.UK website to benefit from the scheme.
For every £8 deposited in a Tax-Free Childcare account, the Government tops it up by £2. This means parents can receive up to £500, or £1,000 if their child is disabled, every three months to pay for their childcare costs.
Once families have opened a Tax-Free Childcare account, they can deposit money and use it straight away, or keep it in the account to use whenever needed. Any unused money in the account can be withdrawn at any time.
Families could be eligible for Tax-Free Childcare if they:
- Have a child or children aged 11 or under. They stop being eligible on September 1 after their 11th birthday. If their child has a disability, they receive up to £4,000 a year until September 1 after their 16th birthday
- The parent and their partner (if they have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
- Each earns no more than £100,000 per annum
- Do not receive Universal Credit or childcare vouchers.
If families are eligible for both, they can receive Tax-Free Childcare at the same time as 30 hours of free childcare. They can check their eligibility and register for an account here.
