Parents with a Tax-Free Childcare account are not using it

Tax-Free Childcare provides help with childcare costs for working parents but fewer than half of parents with a Tax-Free Childcare account are using it.

Tax-Free Childcare provides help with childcare costs for working parents.

According to government statistics, as of March, 282,000 families used Tax-Free Childcare, compared with 248,000 families in December 2020.

According to the government, the percentage of open Tax-Free Childcare accounts being used was steadily increasing until April last year when they fell sharply due to Covid-19.

The statistics reveal that during the first lockdown of the pandemic, there was a significant decrease in accessing the account, dropping from 45% in March 2020 to only 13% two months later.

Jonathan Broadbery, director of policy and communications at National Day Nurseries Association (NDNA) said:

“Any take-up of Government support that helps families and ensures children can access high-quality early education is important because it makes such a difference to children’s outcomes and development. With hundreds of millions in funding being returned to the Treasury in unspent Tax-Free Childcare this should be re-invested in early years.

“It’s vital that the Government supports early years providers. During the pandemic, thousands of childcare providers including hundreds of nurseries have been forced to shut down. Their income simply has not covered their increasing costs. This means that thousands of families are now unable to access local places for their children.

“Less than 50% of open accounts are actually used so the Government must do more to encourage parents across the country to sign up and take advantage of this financial support.

“The overall childcare funding system is too complex for parents and providers. We want to see a single online account for families which brings together all childcare support to ensure funding to support a child’s early learning, follows that child. A simpler system will allow providers to put more resources into working with children and result in greater take-up from families.”

If you would like to find out more about tax-free childcare and check if you’re eligible click here.

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