Government urges families to sign up for Tax-Free Childcare as £57.7 million in top-ups delivered in June…reports Asian Lite News
More than 570,000 families across the UK received help with their childcare bills in June 2025 through the government’s Tax-Free Childcare scheme, with average savings of just over £100 per household.
Figures released by HM Revenue and Customs (HMRC) show that 571,945 families received financial support through the initiative last June, with government top-ups totalling £57.7 million. The scheme allows working families to receive a 20 per cent boost on money they pay into a dedicated childcare account, which can then be used to cover costs for registered childcare providers.
The government has said the scheme is an important part of its wider mission to support working families, help grow the economy, and deliver on the Plan for Change. HMRC is encouraging parents who have not yet signed up to take advantage of the scheme ahead of the upcoming school half-term and holiday period.
Parents can save up to £2,000 per year for each child under the age of 11, while families with disabled children can save up to £4,000 annually until the child reaches 16. The scheme is open to parents who meet eligibility requirements, including earning the equivalent of at least 16 hours per week on the National Minimum Wage or Living Wage, while earning less than £100,000 annually. Families receiving Universal Credit or childcare vouchers are not eligible.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said the savings could provide timely relief for parents as they face additional pressures over the school holidays.
“Hallowe’en doesn’t need to be a tricky time for childcare bills. Whether you’re working and have a child in a holiday club or taking time off and planning term-time care, paying your bills with Tax-Free Childcare can help. Go to GOV.UK to start saving today,” Lloyd said.
The government adds £2 for every £8 deposited into a Tax-Free Childcare account by parents, meaning that families can receive up to £500 in top-ups every three months, or £1,000 in the case of a disabled child. Once the account is open, money can be deposited and used straight away or saved for future use. Unused funds can also be withdrawn at any time if no longer required.
Tax-Free Childcare can be used to cover a range of costs across approved childcare providers. This includes nurseries for younger children and wraparound care for school-age children, such as breakfast clubs, after-school care, and holiday clubs.
The £57.7 million distributed in June represented direct government contributions, which translated into an average top-up of more than £100 per family. Officials are using the latest figures to encourage more families to sign up ahead of the school half-term and the festive period when many parents face higher-than-usual childcare bills.
Once registered, families have the flexibility to pay providers directly from their Tax-Free Childcare account, ensuring payments are made quickly and securely. The scheme is designed to support working parents and ease the financial burden of childcare, which is often one of the largest household expenses.
The scheme is available for children up to the age of 11, with eligibility ending on 1 September following a child’s 11th birthday. For children with disabilities, the age limit is extended to 16.
The latest update is part of the government’s ongoing effort to promote awareness of the scheme, which has been in place for several years but remains underutilised compared to the number of families eligible. By highlighting the benefits ahead of seasonal peaks in childcare demand, HMRC is seeking to increase participation and help families keep more of their income.
According to the rules, families could be eligible if they have a child or children aged 11 or under, or up to 16 if the child has a disability. Parents and their partners, if applicable, must earn at least the equivalent of 16 hours a week on the National Minimum or Living Wage. At the same time, their individual earnings must not exceed £100,000 per year. Families currently claiming Universal Credit or childcare vouchers are not able to use the scheme.
The figures also show how government support can add up quickly for families who plan their childcare spending through the scheme. Over a year, parents depositing £8,000 across different instalments would receive £2,000 from the government, covering a significant proportion of annual childcare costs.
Officials are linking the promotion of the scheme to the government’s broader aim of supporting economic growth. By helping families manage the cost of childcare, the scheme is intended to enable more parents to participate fully in the workforce. Ministers have argued that this contributes to productivity and growth, while also supporting household finances.
