We know that childcare costs are one of the biggest concerns for Mumsnet users - and yet takeup remains low for one government scheme designed to help with those costs.
Exchequer Secretary Helen Whately explains how Tax-Free Childcare works and how to claim it.
"It’s a few years now since I dropped off a child at nursery. But last Wednesday morning I was taken right back to those days when I joined parents at Crofton Nursery just after drop off time, to talk about the cost of childcare.
As Mumsnet users will know, it’s a topic that is never far from the top of the worry list for many parents, and with bills going up the pressure to find savings is greater than ever.
I asked the mums I met – no dads that day – how they were managing.
“Childcare has cost me so much, thousands of pounds,” received nods of agreement all round.
“I’ve been using Tax-Free Childcare,” got nods too, but not so many. Which is the clue to my reason for visiting the nursery that day.
At the moment, around half a million families use Tax-Free Childcare, and that’s been steadily increasing since the pandemic. In fact, figures released today show that 512,415 families used a Tax-Free Childcare account during the 2021 to 2022 tax year, compared to around 374,000 in the previous year. But we also know there are eligible families not yet taking it up.
It’s a scheme particularly to help working parents with their childcare costs, and can save parents up to £2,000 per year for each child. Parents with disabled children can save up to £4,000 a year.
You can get that saving when you pay for breakfast or after-school clubs, holiday clubs, childminders, nurseries or nannies, so long as they are registered with a regulator like Ofsted and signed up for the scheme. If your childcare provider isn’t signed up, it’s a good reason to suggest they do so.
Claiming is simple. You just need to open an online childcare account on gov.uk via the Government Gateway portal and we will top up your deposits.
For every £8 paid into a Tax-Free Childcare online account, families will automatically receive an additional £2 in government top-up. And this support is available for children aged up to 11, or 17 if the child has a disability.
Tax-Free Childcare is simple, quick and parents can withdraw their money at any time up to two years if not needed for childcare. Families with younger children will often have higher childcare costs than families with older children, so a 20% top-up can really make a difference.
Working parents on Universal Credit can also claim back up to 85% of their childcare costs, which is significantly more generous than the previous benefits system.
Many two-year olds and three-year olds are eligible for 15 or 30 hours free childcare too. We know those hours of free childcare make a huge difference for parents being able to return to work, but on their own are often not enough. That’s where Tax-Free Childcare helps you afford some extra hours of childcare.
I know that these are difficult times. That’s why the government has already stepped in to help with the cost of living, with £22 billion of direct support including over £9 billion of help for energy bills.
Across the government we’re continuing to look at ways of supporting families through these challenging times.
In the meantime, Tax-Free Childcare is one of the best ways to help families with the cost of childcare bills.
With over one million families eligible, I want to encourage as many people as possible to take advantage of this and put extra pounds in their pocket.
Just like the mums I met last week, I want to make sure you get the help you’re entitled to. Visit www.childcarechoices.gov.uk to check."
Helen Whately is a Conservative Party MP for Faversham and Mid Kent. She was previously Minister of State at the Department of Health and Social Care and Parliamentary Under Secretary of State at the Department for Digital, Culture, Media and Sport. If you have any questions for Helen, please post them below.