Working families could save almost £100 a month on nursery fees, holiday clubs and after-school care – but many are still not claiming the support they're entitled to.
Working parents are being urged to check whether they qualify for Tax-Free Childcare, with HM Revenue & Customs (HMRC) revealing families using the scheme save an average of almost £100 every month.
The reminder comes ahead of Playday (August 5) as many parents continue to face soaring childcare bills over the summer holidays and prepare for the new school term.
Eligible families can receive up to £2,000 a year per child to help cover the cost of childcare, or up to £4,000 a year for a disabled child, by opening a Tax-Free Childcare account.
The scheme can be used to pay for a wide range of approved childcare, including nurseries, childminders, holiday clubs, breakfast clubs and after-school clubs.
Under the scheme, the Government adds £2 for every £8 parents pay into their childcare account, effectively giving families a 25% top-up towards eligible childcare costs.
Want to save on your childcare bills this summer and the school term ahead? Find out how with Tax-Free Childcare👇 https://t.co/H1Ih3XIIU4
— HMRC Press Office (@HMRCpressoffice) August 4, 2026
Thousands more parents with older children are claiming
New HMRC figures also show growing numbers of families are using the scheme beyond the early years.
The number of families claiming Tax-Free Childcare for children aged eight and over has risen by more than 20% compared with the previous year, suggesting more parents are using it to help cover the cost of holiday clubs and wraparound school care.
Nearly 75,000 childcare providers across the UK are now signed up to accept Tax-Free Childcare payments.
HMRC urges parents not to miss out
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'."
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Who can claim Tax-Free Childcare?
You may qualify if:
- You have a child aged 11 or under (or 16 or under if they have a disability).
- You and your partner (if you have one) each earn at least the equivalent of 16 hours a week at the National Minimum or Living Wage.
- Neither parent earns more than £100,000 a year.
- You are not receiving Universal Credit or childcare vouchers.
Parents can open an account for each eligible child and use the money immediately or leave it in the account until it's needed.
Any unused money can also be withdrawn.
The scheme can also be used alongside the Government's funded childcare hours, provided families meet the relevant eligibility rules.
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