826,000 UK families cut childcare costs with tax-free scheme offering up to £2,000 per child

Nearly 826,000 working families across the UK benefited from significant savings on childcare in the 2024 to 2025 tax year, according to the latest figures from HM Revenue and Customs (HMRC).

The government’s Tax-Free Childcare scheme delivered £632.2 million in top-up payments to parents to help cover childcare bills, with the initiative continuing to play a key role in supporting household budgets and stimulating economic growth through the government’s Plan for Change.

The scheme enables eligible working families to receive up to £2,000 per child annually—or up to £4,000 for a disabled child—to assist with a range of approved childcare costs. These include nursery fees, after-school clubs, wraparound care during term time, and holiday clubs over the summer.

In Northern Ireland alone, 15,660 families made use of the scheme in March 2025—an increase of 2,970 compared to the same month the previous year—highlighting growing awareness and uptake.

A financial boost for summer

With summer approaching, HMRC is urging families yet to register for the scheme to act now and take advantage of the available support.

“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,” said Myrtle Lloyd, HMRC’s Director General for Customer Services.

The scheme operates on a simple principle: for every £8 parents deposit into their Tax-Free Childcare account, the government adds £2—up to a maximum of £500 every three months per child, or £1,000 if the child is disabled.

Once the account is set up, families can start using it immediately or save the funds for future childcare needs. Crucially, any unused money can be withdrawn at any time, offering flexibility alongside financial support.

Who qualifies for tax-free Childcare?

Families may be eligible if they:

• Have a child aged 11 or under (or up to **16 if the child has a disability)

• Each earn, or expect to earn, at least the National Minimum or Living Wage for 16 hours per week on average

• Earn no more than £100,000 annually per person

• Are not receiving Universal Credit or childcare vouchers

Tax-Free Childcare can also be used in conjunction with free childcare hours, depending on eligibility.

Parents and guardians can check if they qualify and register via the official government website: GOV.UK.

Supporting families and the economy

The continued success of the scheme forms part of the UK Government’s broader efforts to reduce financial pressures on families while enabling more parents to work or increase their working hours.

As more families sign up, the government hopes the initiative will continue to boost household budgets while contributing to wider economic goals.

With the summer holidays fast approaching, HMRC encourages eligible families to explore the scheme without delay and make the most of the financial support available.