Tax Free Childcare Accounts Used By Over 140,000 Families

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August 19th 2022
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Tax Free Childcare Accounts Used By Over 140,000 Families

New stats show growth in usage of government funded childcare accounts.

Since launching in 2017 tax-free childcare accounts have been growing steadily, with latest stats showing over 140,000 families actively using the accounts and receiving top-ups this June.

The accounts replaced the childcare vouchers schemes unless parents were already registered and continued to use them. Tax-Free childcare had the added advantage that self-employed people could now also receive tax relief on childcare costs.

Parents depositing money into a tax-free childcare account receive an additional £2 added for every £8 they pay-in, subject to limits.

Seasonally the figures show that this summer more than double the usage occurred compared to last year. Around 60,000 families used the accounts in June last year.

Most parents opt to use the accounts for children aged one or two with usage for children aged five or above far less.

In June 2019, usage of the accounts for childcare by age groups was:

Age GroupChildren
0 years6,000
1 years46,000
2 years41,200
3 years29,600
4 years20,100
5+ years27,700

Top-ups paid by the government have steadily increased as the more accounts are funded. Most usage is in the South-East and London followed by the North-West.

Sixty percent of opened accounts have not been utilised. Parents have not made a payment from the account to a childcare provider.

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