The UK government is encouraging families to take advantage of the Tax-Free Childcare scheme, which can help reduce childcare costs ahead of the Easter break. The scheme, launched in 2017, allows families to claim up to 20% of their childcare costs, up to a maximum of £10,000 per year. This can translate to savings of up to £2,000 per year for eligible families.
To be eligible, families must have an annual income of £100,000 or less, and both parents must be working. The scheme is available for children under 12, or under 17 if the child is disabled. Parents can claim the tax-free childcare allowance through the UK government's website, and the money can be used to pay for a wide range of childcare services, including nursery fees and after-school clubs.
According to the UK's Office for National Statistics (ONS), 1 in 4 families in the UK are using the Tax-Free Childcare scheme, with over 2 million families claiming the allowance since its launch. The scheme has saved families an estimated £1.4 billion in childcare costs to date.
The news comes as the UK's cost of living continues to rise, with inflation hitting 7.9% in March 2023, according to the Office for National Statistics (ONS). The Bank of England has increased interest rates to combat inflation, which has led to higher mortgage rates and increased borrowing costs for households.