HMRC has urged 400,000 UK families to check if they are missing out on tax-free childcare worth up to £2,000 a year. New analysis from AJ Bell suggests hundreds of thousands of households are not taking advantage of this support. In the 2025/26 year, 868,095 accounts were used out of an eligibility pool of up to 1.3 million.
Those who register for tax-free childcare receive an account to pay for care for children up to age 11. The Labour government automatically tops up every £8 deposit with an additional £2, up to a maximum of £2,000 per year.
HMRC encouraged UK households to "save thousands" on their bills by signing up earlier this year, noting that over 500,000 families saved on childcare spending in December 2025.
Expert Comments on the Scheme
Myrtle Lloyd, HMRC's chief customer officer, said: "£2,000 a year off childcare bills can make a big difference to household expenses. There are plenty of childcare providers to choose from to suit your needs and your children's interests."
Charlene Young, senior pensions and savings expert at AJ Bell, said many families find the system "clunky" and not straightforward to operate. She told Sky News: "You must register online for each of your eligible children to begin with, and then make sure you reconfirm eligibility every three months so that you can use and receive the Government top-up.
"The maximum Government top-up works out as £2,000 a year, this is limited to £500 every three months and is not available in one go. While you can set up regular payments to fund the accounts and pay childcare providers, childcare providers and holiday clubs charge in different ways, which might mean constant logging in and out of accounts to make sure you've paid the right amounts on time."
