You are here: Home - Household Bills - News -

Parents urged to check Tax-Free Childcare balances

0
Written by: Emma Lunn
20/05/2020
More than £18m could be languishing in unused Tax-Free Childcare accounts, according to Royal London.

The insurer carried out a Freedom of Information request to find out the average unused balance in the accounts. It found the average unused balance before the lockdown on 9 March was £83.75 per account.

The latest quarterly statistics on the use of Tax-Free Childcare accounts show that 218,000 families used Tax-Free Childcare accounts in March, down from a high of more than 220,000 in January.

The decrease is due to nurseries, childminders and after school clubs being forced to close due to lockdown.

Tax-Free Childcare accounts offer a 25% Government top-up towards the cost of childcare for parents of under 12s. This means that for every £8 paid in by parents, a further £2 is added by the Government, up to a maximum top-up of £2,000 a year.

Payments to the accounts are made manually by parents, the top-up is added by the Government, then the parent pays their childcare provider.

Royal London says that as many parents are not currently using their usual childcare provision, they should check whether they have an unused balance in their Tax-Free Childcare account that they might wish to withdraw back into their current account.

Becky O’Connor, personal finance specialist at Royal London, says: “There were fewer parents paying for childcare using Tax-Free Childcare accounts in March, as nurseries and childminders closed their doors at the beginning of lockdown and children were required to stay at home.

“We are urging parents to check whether they have an unused balance in their tax-free childcare account. If they do not need to pay for childcare imminently, withdrawing any unused balance and putting back in their current accounts could help the family finances.”

Earlier this month is was confirmed that parents would still be eligible for 30 hours of free childcare if their income dropped below the minimum threshold as a result of coronavirus.

Parents feared they may no longer qualify for the scheme if they experienced a fall in income. To qualify for the scheme, each parent must work and earn a weekly minimum of the equivalent of 16 hours at national minimum wage or living wage (£139 per week), and less than £100,000 a year.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
TUC sets out plan to avoid mass unemployment

The Trades Union Congress has published a report which sets out how the UK can get out of recession.

Close