The UK government offers several schemes to help reduce childcare costs for working families. Understanding which scheme you're eligible for can save you thousands of pounds per year. The main schemes are Tax-Free Childcare, 15 and 30 Hours Free Childcare, and Child Benefit. It's important to check eligibility for each, as you can often use multiple schemes at the same time to maximize your support.
Tax-Free Childcare is a government scheme designed to help working parents with the cost of childcare. It works like an online savings account that you, and others like grandparents or family friends, can pay into. For every £8 you contribute, the government automatically adds an extra £2. This top-up is equivalent to the basic rate of tax, hence the name 'Tax-Free Childcare'. Over the year, you can receive up to £2,000 per child (or £4,000 for a disabled child) towards your childcare bills. This money can then be used to pay your approved childcare provider directly from your account.
This scheme provides a set number of free hours at a registered childcare provider. All 3 and 4-year-olds in England are entitled to 15 hours of free childcare per week during term time. Eligible working parents can get an additional 15 hours, making it 30 hours a week. Some 2-year-olds are also eligible for 15 hours, depending on family circumstances.
Child Benefit is paid to anyone responsible for raising a child under 16 (or under 20 if they stay in approved education or training). There are two rates: one for your eldest or only child, and a lower rate for any additional children.